Rising prices dent jewellery demand while investors turn to gold ETFs, bars and coins amid weak equities, says the World Gold Council
Investment demand for gold in India surpassed jewellery consumption for the first time ever in the March quarter, highlighting a clear shift in buying behaviour as investors turned to the metal amid lacklustre equity returns, the World Gold Council said on Wednesday.
Higher buying of gold bars, coins and exchange-traded funds helped cushion the impact of weaker jewellery demand, which declined due to elevated prices affecting consumer sentiment. Despite this, overall gold demand remained stable.
The report showed investment demand jumping 52 per cent year-on-year to 82 tonnes, while jewellery consumption fell 19.5 per cent to 66 tonnes. Total gold demand in India rose 10.2 per cent to 151 tonnes during the quarter.
Notably, investment accounted for 54.3 per cent of total demand—overtaking jewellery for the first time. Traditionally, investment contributes only around a quarter of the country’s gold consumption.
Sachin Jain said investment demand is expected to stay robust, driven by both retail and institutional participation, and will likely gain greater prominence in the coming quarters.
Gold exchange-traded funds saw a sharp surge in inflows, rising 186% year-on-year to a record 20 tonnes.
The trend has been supported by subdued equity market performance, with the Nifty 50 gaining just about 2.4 per cent since early 2025, while domestic gold prices have nearly doubled over the same period.
This gap in returns has encouraged investors to increase their allocation to gold, strengthening its appeal as a safe-haven asset during uncertain market conditions.
