India Sees Shift in Gold Demand as Investment Purchases Outstrip Jewelry Sales for the First Time

India's Gold Demand Shifts as Investment Surpasses Jewellery Consumption

India's investment demand for gold surpassed jewellery consumption for the first time on record in the March quarter, as investors turned to the precious metal amid subdued equity market returns, the World Gold Council (WGC) announced on Wednesday.

The WGC reported that stronger investment demand in the world's second-largest consumer of gold partly offset a decline in jewellery buying, hit by a rally in prices, helping keep overall demand stable. This shift in demand highlights a significant trend in India's gold market.

Sachin Jain, chief executive of the WGC's Indian operations, noted that investment demand will become increasingly prominent in the coming quarters, with both financial and retail investors showing more interest in gold.

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Key statistics from the WGC's report include:

Investment demand surged 52% from a year earlier to 82 metric tons in the March quarter, while jewellery demand fell 19.5% to 66 tons. Total gold consumption in the country rose 10.2% to 151 metric tons during the quarter.

For the first time, investment demand accounted for a larger share of total consumption than jewellery, rising to 54.3% in the quarter. This shift is attributed to rising prices prompting investors to buy coins, bars, and gold exchange-traded funds (ETFs).

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Inflows into gold ETFs jumped 186% in the March quarter from a year earlier to a record 20 tons, the WGC said. Weak stock market performance in recent quarters has been drawing investors to gold ETFs, and the trend is likely to continue.

Domestic gold prices have nearly doubled since the start of 2025, while India's benchmark Nifty 50 has risen 2.4% during the period.