Indian Gold Demand Falls 29% to 162.5 Tonnes Despite Higher Value
Key Facts
India’s total gold demand fell 29% year on year to 162.5 tonnes in the third quarter of 2026, despite rising 24% from the second quarter, according to World Gold Council data published on November 3. The divergence between the two comparisons shows that lower volumes than a year earlier coincided with a quarterly rebound in purchases. By contrast, demand value rose 3% year on year to 2,419 billion rupees, supported by higher domestic prices. The council said a weaker rupee and higher import duties helped support local prices. The quarter’s performance reflects the strain high prices put on purchasing power, alongside differences in the timing of festivals between the two years.
Jewellery demand reached 99.9 tonnes, up 33% from the second quarter but still 20% below its level in the third quarter of 2025. The council said gold’s price decline near the end of the quarter encouraged some buyers to make purchases they had postponed. Wedding-season and festival buying also supported demand, particularly in southern India. The average domestic price rose to 148,891 rupees per 10 grams, up 45% year on year, despite falling 1% from the previous quarter. The council attributed support for domestic prices to the weaker rupee and higher import duties, while the average international price was $4,262 an ounce, up 23% year on year and down 5% quarter on quarter.
Within investment demand, purchases of bars and coins rose 9% quarter on quarter to 55 tonnes, but fell 40% year on year. The council attributed part of the annual decline to a high comparison base and a return in investor purchases to more usual levels after price momentum eased. It said the 9-percentage-point increase in gold import duties in May may also have affected demand for these products. In gold-backed exchange-traded funds, demand rose to 5.3 tonnes in the third quarter from 3.6 tonnes in the second quarter. Holdings in those funds stood at about 124 tonnes at quarter-end, while a council survey showed the share of consumers expecting to increase jewellery purchases over the following three months rose to 29% in the September wave, from 20% in the first wave.
India’s gold supply fell to 136 tonnes in the third quarter, down 43% from the same period last year, according to the council’s estimate. Official bullion imports, including doré, dropped to 64 tonnes, a 70% year-on-year decline. At the same time, the council estimated unofficial gold flows at about 50 tonnes, compared with 3 tonnes in the third quarter of 2025, when import duties were 6%. The figures indicate that declining official imports coincided with an increase in estimated unofficial flows during the quarter. The May increase in customs duties raised the burden on imports, and the council said higher duties and restrictions tend to weigh on demand.
In the first nine months of 2026, Indian gold demand fell 12% to 444 tonnes, while its value rose 38% to 6,688 billion rupees. The World Gold Council said India is the largest jewellery market and the second-largest market for bars and coins, highlighting the differing purchase trends for consumer and investment uses. Calendar differences also affected the year-on-year comparison for the third quarter: festivals that supported demand in the same period last year fell in the fourth quarter this year. Volume pressures therefore reflected not only prices but also the absence of comparable seasonal support during the quarter. Quarterly figures and nominal values remain affected by price movements and the timing of seasonal demand.
The World Gold Council expects seasonal support for demand in the fourth quarter from the festival and wedding season, including Diwali buying, though high prices and a weak rural economy after a poor monsoon could limit the improvement. Investment demand is also likely to remain positive and sensitive to price momentum. For the full year, the council forecast Indian demand would fall to about 650 tonnes, its lowest level in six years, according to comments by its head of operations in India to Reuters. The estimate puts the festival and wedding season to the test of balancing the effects of high prices and purchasing power. The council said fourth-quarter purchases may improve, while these factors remain a constraint on the scale of the increase.