Gold Price Volatility Hits Indian Jewellery Retail Margins
The Indian jewellery retail sector is poised for growth, but rising gold prices and industry formalization are putting pressure on margins. According to Elara Securities, a report dated September 25, the sector will grow between 22-27 per cent year-over-year in Q2FY27.
Gold prices have increased by approximately 45 per cent year-over-year during the quarter. Despite steady demand and robust growth in July and August, the high base from September 2025 is expected to weigh on Q2 growth.
The report highlights that around 60 per cent of the jewellery industry remains unorganized. As the sector shifts towards organized retail, formalization across the value chain is accelerating, which may lead to intensifying competition and margin pressure.
Differentiated brand positioning and a stronger product assortment are becoming increasingly important for buyer growth. Higher gold prices are affecting buyer additions in plain gold jewellery, particularly for basic designs, while new players' rapid expansion is intensifying competition and driving down making charges.