As gold prices continue to scale historic peaks, Indian buyers are recalibrating how they hold the precious metal. Long associated with weddings, festivals and cultural traditions, gold is being bought increasingly as an investment rather than ornament, as soaring prices and high making charges dampen demand for jewellery. This shift reflects broader changes in consumer behaviour, with coins, bars and digital gold gaining traction over traditional jewellery purchases.
Record rallies in global gold prices have driven this transformation. Spot gold recently traded near an all-time high around $4,500 per troy ounce — about ₹4,04,000 per ounce — on strong safe-haven demand and expectations of monetary easing abroad. Domestic prices in India have surged even more sharply this year, rising around 77 percent, significantly outperforming major equity benchmarks.
The impact on buying habits is evident across households. Many long-time gold buyers have opted for smaller, investment-oriented formats such as 10-gram coins and small bars, citing reluctance to pay steep making charges on jewellery that add roughly 15 percent or more to the cost. Others are seeking lightweight designs or lower caratage to manage budgets as price pressures mount.
Market data point to a marked shift in total consumption patterns. According to the World Gold Council, India’s overall gold demand in the first nine months of the year fell about 14 percent year on year, with jewellery consumption plunging nearly 26 percent to around 278 metric tons. In contrast, investment demand — including coins, bars and exchange-traded funds (ETFs) — rose by about 13 percent to roughly 185 tons, representing a record 40 percent share of total demand.
Industry analysts and trade bodies interpret these trends as structural rather than temporary. The prolonged rally in bullion prices, coupled with a weaker rupee against the US dollar, has made traditional jewellery less affordable for many buyers. Jewellers have responded by introducing sub-brands and collections featuring lighter and lower-carat options to keep designs attractive and within reach.
Gold-backed ETFs listed in India have seen robust inflows this year, with net investments equivalent to nearly 28.7 tons, raising total holdings to over 86 tons, as investors increasingly view gold as a store of value.
Consultancies tracking the market expect jewellery demand to remain subdued through 2026, with a continued tilt toward investment products and alternative gold formats. Younger consumers and working professionals are also showing greater acceptance of lower-carat jewellery, reflecting evolving preferences in India’s vast and diverse gold market.