Gold Prices Struggle Amid Volatility: Investment Demand Falls 8-10% in India

Gold investment demand in India has been on the decline, despite its traditional role as a hedge against inflation and safe-haven asset during uncertain times. The US-Iran war has contributed to gold's volatility, with prices crossing Rs 2 lakh per 10 grams in January but falling consistently since then.

According to Surendra Mehta, National Secretary of the India Bullion and Jewellers Association (IBJA), investment gold sales have declined by around 8% to 10% compared to last year. The range-bound movement of gold prices, which has largely remained in the Rs 1.40 lakh to Rs 1.51 lakh per 10 grams range in recent months, has made investors cautious about making fresh investments.

India's total gold demand stood at 131 tonnes in Q2 2026, down 6% year-on-year, with jewellery demand falling 15% year-on-year to 75 tonnes. Investment demand also moderated to 54 tonnes, compared to an average of 100 tonnes in the preceding three quarters.

SEBI-registered market expert Anuj Gupta believes that gold prices will touch Rs 1.65 lakh per 10 grams by Diwali and potentially reach Rs 3 lakh per 10 grams over the next 3 to 5 years, citing the yellow metal's strong outlook and investor buying on dips during periods of price declines.