Even with a steep 15% drop in gold demand in India in the January–March 2025 quarter, one thing is certain: Indians haven’t lost their love for gold; they’re just being more cautious. The World Gold Council (WGC) says India used 118.1 tonnes of gold in Q1 2025, compared to 139 tonnes last year. However, the worth of that gold increased by 22% to ₹94,030 crore, fuelled by a 25% rise in gold prices since the beginning of the year.
On the surface, the scenario may appear to be a typical case of weakening demand. But below the surface, India’s gold tale remains as culturally entrenched and emotionally strong as ever. The fall is more a result of high prices suppressing affordability than sentiment. And the forces driving this change reflect a deeper transformation in consumer behaviour in the face of economic uncertainty and shifting price expectations.
Gold’s Price Rally: A Double-Edged Sword
Gold’s psychological barrier, ₹1,00,000 per 10 grams, is fast becoming a familiar landmark. With the average quarterly price already reaching ₹79,633 in Q1 2025 (from ₹55,247 in Q1 2024), most consumers, particularly those in the middle-income group, are priced out. The effect is a change in buying behaviour: consumers are either purchasing small, lightweight pieces or delaying purchases in the expectation that prices will ease.
And yet, the cultural allure of gold, especially in the run-up to festivals such as Akshaya Tritiya and the Indian wedding season, remains the foundation for a fundamental level of demand. As WGC India CEO Sachin Jain correctly observed, gold maintains its strong cultural appeal, especially during periods of celebration and change.
Jewellery Demand Falls, Investment Demand Increases
The more dramatic change is in the makeup of gold demand. Jewellery demand fell 25% to 71.4 tonnes, the lowest since 2020, indicating that decorative purchases are suffering the most. Investment demand, however, increased 7% to 46.7 tonnes, showing gold’s renewed popularity as a safe-haven asset in turbulent financial markets.
This double trend implies that although customers might avoid buying heavy gold jewellery in the near term, they are not turning their backs on gold. Rather, they are shifting their spending towards more practical, liquid expressions of gold in the form of coins and bars — assets that have not only visual but also strategic financial value.
Imports Up, Recycling Down: Is This a Bullish Sign?
Surprisingly, gold imports increased by 8% during Q1 2025 to 167.4 tonnes, while recycling volumes dipped by 32% to a mere 26 tonnes. This means consumers are not offloading their gold holdings despite all-time-high prices. Far from it; they are holding on tighter, considering gold a store of value amid macroeconomic uncertainty. This activity indicates a bullish long-term perspective among Indian households, who still see gold as an intergenerational asset rather than a short-term investment.
What Lies Ahead?
WGC’s year-end estimate puts India’s gold demand at 700–800 tonnes in 2025. It all depends on price stability and macroeconomic confidence — whether this target is met remains to be seen. If prices stabilise or correct a bit, pent-up demand can come back strongly, especially during the festive and wedding-heavy second half of the year.
But even if prices stay high, gold is not going to lose its sparkle in India. It might change in shape and purpose — from chunky necklaces to light ornaments, from wedding trousseaus to digital gold vaults — but its position in Indian consciousness is by no means up for grabs.
Conclusion: Not a Decline, But a Transformation
Overall, India’s gold market is not losing love but evolving in style. Consumers are growing more price-conscious and investment-oriented yet remain committed to gold’s cultural and symbolic significance. The statistics may ebb and flow, but sentiment is steadfast: for Indians, gold is not merely a commodity, blessed be it — it is a tradition, a hedge, and quite frequently, a legacy.
