According to a report by the World Gold Council, gold demand in India decreased to 131.4 tonnes in the quarter from April to June. This represents a 6% decline compared to the same period last year, attributed to seasonal sales slump, increased customs duties, and Prime Minister Narendra Modi's call to reduce precious metal purchases.
Paradoxical rise in consumption value
Despite the overall drop in volume, the value of gold consumption reached record levels. In the specified quarter, consumption amounted to 198,100 crore rupees, significantly higher than 132,500 crore rupees in the same period of 2025, demonstrating a 50% growth. This highlights that consumers continue to prioritize gold even amid high prices.
Forecasts and future risks
The WGC forecasts that total demand for the entire year will remain in the range of 650 to 750 tonnes. Sachin Jain, WGC's Regional Director for India, noted that the current geopolitical situation, interest rates, and inflation may lead to actual demand being closer to the middle of this range. He added that the upper limit is possible with a decrease in gold prices and reduced customs duties.
Impact of government measures
Overall jewelry demand in India in the quarter under review fell by 15%, reaching 75.1 tonnes compared to 88.8 tonnes the previous year. Jain explained this as a combination of factors: seasonal slowdown, the Prime Minister's appeal for smaller gold purchases, and increased customs duties. Prime Minister Modi called on citizens in May to reduce non-essential gold purchases and seek alternative ways to preserve foreign exchange reserves amid rising import bills due to crude oil price volatility.
Investment demand and concerns
Meanwhile, investment demand remained encouraging: demand for bars and coins grew by 9% year-on-year, reaching 50.3 tonnes. Furthermore, Indian gold ETFs attracted a net inflow of 4.2 tonnes despite global capital outflows. Jain expressed concern about the rise in illegal trade following the increase in duties, citing reports that smuggled gold is already entering the markets. He stated that they will monitor this situation in subsequent quarters.
Other gold market trends
In addition, during the April-June quarter, 19.2 tonnes of gold were recycled in India, which is 17% less than the 23.1 tonnes the previous year. Total gold imports into India in the second quarter of 2026 amounted to 98.1 tonnes, which is 23% lower than the 127.4 tonnes recorded in the same period of 2025. The average gold price in the second quarter was $4,506.3 per ounce, compared to $3,280.4 in 2025. In India, the average quarterly gold price in April-June was 150,744.8 rupees (excluding import duty and GST), whereas the previous year it was 94,875.9 rupees.



