Gold Demand Drops as Indian Consumers Adapt to Record Prices

India's gold demand declined by 6% year-on-year to 131.4 tonnes in the April-June quarter of 2026, but spending on the precious metal surged 50% to a record Rs 1.98 lakh crore, according to the World Gold Council (WGC). The sharp divergence between volumes and value underscores the impact of elevated gold prices on consumer spending.

Domestic gold prices remained nearly 59% higher than a year earlier during the quarter, making the yellow metal significantly more expensive even as consumers continued to buy it for jewellery and investment. Rather than abandoning gold purchases altogether, consumers increasingly adapted their buying patterns to manage affordability.

Jewellers reported stronger demand for lighter-weight ornaments, lower-carat jewellery, and studded pieces. Exchange schemes also gained traction, with some jewellers reporting that exchanged jewellery accounted for as much as 70% of sales.