India's gold demand to hit 6-year low in 2026
What's the story
India's gold demand is projected to hit a six-year low in 2026, driven by high prices and weakening rural demand, as per the World Gold Council (WGC). Sachin Jain, CEO of WGC's Indian operations, told Reuters that the country's total gold demand is likely to fall to around 650 metric tons this year. This would be the lowest since 2020, when COVID-19 pandemic led to temporary closures of jewelry shops across India.
Market conditions
Gold imports fell in September quarter
The WGC attributed the decline in gold demand to high prices and a weak monsoon season.
He said, "Jewellery purchases declined 20% and investment demand dropped 40%."
The WGC's report also noted that India's gold imports fell in the September quarter. This was partly due to a surge in unofficial inflows after the government raised import duties on the precious metal earlier this year.
Seasonal impact
Hope for demand pick-up in December quarter
Despite the challenges, Jain is hopeful that gold demand will pick up in the December quarter. He said key festivals such as Diwali and the wedding season could drive purchases.
However, high prices and a struggling rural economy due to a poor monsoon are likely to limit this increase.
More than half of India's gold demand comes from rural areas where jewelry is seen as a traditional store of wealth for millions.