India's Gold Market Shifts Towards Investment Demand

India's gold market is experiencing a significant shift in demand patterns, driven by a combination of global uncertainties and changes in consumer behavior. According to the World Gold Council, India's overall gold demand was up 2% year-on-year (YoY) to 282 tonnes in the first half (H1) of this year, driven primarily by investment demand.

The data shows that jewellery demand declined 17.1% to 141.2 tonnes, while investment demand increased to 54 tonnes in Q2, higher than the long-term quarterly average of 49 tonnes. This trend is expected to continue as consumers increasingly treat gold as a financial instrument rather than just a consumption good.

The Reserve Bank of India (RBI) has also played a role in promoting gold purchases, stepping up its own gold purchases in 2025 as global prices rallied sharply. This move helped cushion the impact of rupee depreciation and strengthened India's external balance.