India's Gold Demand Drops 6% to 131 Tonnes Amid Price Hikes

India's gold demand dropped to 131 tonnes in Q2 of 2026 due to high prices and import duty hikes, which deterred jewellery buyers. Despite this decline, the total financial value surged by 50% to ₹1.98 lakh crore. The sharp drop in demand was largely driven by a 15% fall in jewellery sales, which fell to 75 tonnes.

The rise in gold prices has made consumers cautious and they are opting for non-essential purchases. Market trends suggest that this trend may continue if prices remain high. Jewellers are now grappling with inventory levels, which have reached 21 tonnes, a figure above the 13-year average.

Investment gold demand showed mixed results, with gold bars and coins seeing a 9% increase in demand to 50 tonnes. However, investments through Gold Exchange Traded Funds (ETFs) cooled down compared to the previous quarter, indicating a potential plateau in institutional and retail interest at current price points.