In value terms, total demand almost doubled to a record ₹2,27,530 crore from ₹1,14,600 crore in the same period last year.

A major trend during this period was the sharp shift in buying patterns. Investment demand — including bars, coins and exchange-traded funds (ETFs) — surged 54 per cent to 82 tonnes, overtaking jewellery demand for the first time in WGC’s records since 2000. Investment accounted for 55 per cent of total demand, while jewellery’s share dropped to 44 per cent, its lowest on record.

Jewellery demand weakens as prices soar

Jewellery demand during this period fell 19 per cent year-on-year to 66.1 tonnes from 82 tonnes between January and March 2025, as record prices reduced affordability, particularly for budget-conscious buyers. However, higher prices pushed the value of jewellery purchases up 47 per cent to ₹99,900 crore.

According to the WGC, jewellery volumes were among the weakest in over two decades, largely due to an 81 per cent year-on-year rise in domestic gold prices. Wedding purchases and buying by affluent consumers continued to support the segment, while many buyers shifted to lighter, lower-carat and studded jewellery.

Exchange of old gold remained a crucial part of the market, contributing 40-60 per cent of transactions across retailers. Listed jewellers posted revenue growth of 32-124 per cent during this period, supported by higher ticket sizes and strong coin sales.

India retained its position as the world’s second-largest jewellery market after China, accounting for 22 per cent of global jewellery demand, the World Gold Council said. 

Investment demand surges

Demand for bars and coins rose 34 per cent to 62.3 tonnes, while value surged 142 per cent to ₹94,100 crore.

Bars and coins nearly matched jewellery demand, signalling a notable shift in India’s traditionally jewellery-led gold market. Their share in domestic demand rose to 41 per cent, the highest in WGC’s historical dataset.

Gold ETFs also posted record growth. ETF demand reached an all-time high of 19.9 tonnes, nearly tripling from 6.7 tonnes a year ago. In value terms, ETF investments soared 437 per cent to ₹30,000 crore.

Nearly 80 per cent of ETF inflows came in January, as investors rushed to gold amid strong price momentum. Although redemptions increased later in the January-March period due to profit-booking, buying resumed during price dips. ETF holdings reached 115 tonnes by the end of March, while assets under management rose to ₹1.7 trillion.

Record prices alter market dynamics

Domestic gold prices averaged ₹1,51,105 per 10 grams between January and March 2026, sharply higher than ₹83,375 a year earlier. International gold prices averaged $4,873 per ounce, compared with $2,860 during the same period in 2025.

MCX spot gold prices rose 20 per cent sequentially and 81 per cent year-on-year, hitting record highs before correcting by about 15 per cent.

“India’s gold market in 2026 reflects a continued divergence between volume trends and value growth, shaped by record-high prices and evolving consumer preferences,” said Sachin Jain, regional chief executive officer, India, World Gold Council.

Imports, recycling and gold-backed loans increase

India’s gold imports rose significantly to 186 tonnes between January and March 2026, driven by strong investment demand early in the year. Recycled gold supply also increased 20 per cent year-on-year to 31.2 tonnes.

Despite higher recycling, many consumers chose to monetise rather than fully liquidate their holdings, limiting scrap supply growth.

Gold-backed borrowing remained robust as well, with outstanding retail loans against pledged jewellery rising 124 per cent year-on-year to ₹4.3 trillion by end-February.

Global demand also remains strong

Worldwide, total gold demand rose 2 per cent year-on-year to 1,231 tonnes between January and March 2026, while demand value surged 74 per cent to a record $193 billion.

Central banks remained active buyers, adding 244 tonnes, while technology demand edged up 1 per cent, supported by growing AI infrastructure requirements.

Outlook for India gold demand

The WGC expects India’s investment demand to remain resilient, supported by geopolitical uncertainty, price momentum and gold’s safe-haven appeal. However, elevated prices, inflation and monsoon-related risks may continue to pressure jewellery demand, especially in rural and price-sensitive markets.

“Looking ahead, while elevated prices may act as a near-term headwind for jewellery demand, the summer wedding season and regional festivals are expected to provide support, building on the momentum seen during Akshaya Tritiya,” Jain said.

He added that gold would likely continue to attract investors as a portfolio diversifier amid global uncertainty, with full-year demand projected at 650-750 tonnes.