India's Gold Demand Shifts Towards Lighter Jewellery and Financial Forms
As India enters its festive season, gold demand remains high, but consumer buying habits are shifting in response to rising prices. The domestic price of gold has surged around 60% in a year, reaching approximately Rs 1.57 lakh per 10 grams. This increase is attributed to the global rise in gold prices, a weaker rupee trading at Rs 95.6 to the US dollar, and an import duty hike from 6% to 15% in April.
This price surge has led to a decline in jewellery volumes during Ganesh Chaturthi by around 15%, although the value of purchases remains relatively stable. Consumers are opting for lighter, lower-carat pieces and studded items, with old-gold exchanges helping bridge the affordability gap. Nikunj Saraf, CEO of Choice Wealth, noted that 'the 60% year-on-year surge has reshaped the cart, not killed the intent.' Buyers are trading down in weight but not abandoning their gold purchases.
The shift towards lighter jewellery and financial forms of gold is becoming increasingly evident. Gold ETFs have seen significant inflows, with Rs 1,559 crore in July and a 67% month-on-month increase to Rs 2,597 crore in August. The assets under management reached around Rs 1.91 lakh crore in August.
Akshat Garg, Head of Research & Product at Choice Wealth, observed that consumers are now separating jewellery from investment, preferring products that can be bought in smaller quantities and held more easily. Digital gold purchases have also seen a significant increase, with around Rs 2,500 crore being spent each month since June.