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Informist, Monday, Jun. 8, 2026

 

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--Metals Focus Barot: India gold investment demand to rise marginally in 2026
--CONTEXT: Metal Focus' senior research consultant Harshal Barot in interview
--Metals Focus Barot: Indian MFs discouraging large ticket consumption in ETF
--Metals Focus Barot: Indian MFs signalling to help country manage CAD
--CONTEXT: Barot referring to Indian MFs suspending lump sum gold ETF invest
--Metals Focus Barot: Retail investment demand for ETFs seen up 2-3% YoY 2026
--Metals Focus Barot: India gold jewellery demand to fall 6% in 2026
--Metals Focus Barot: Gold prices to resume uptrend once war cloud subsides
--Metals Focus Barot: See gold, silver at record high in 2026-end, early 2027
--Metals Focus Barot: Global central banks to be "substantial buyers" of gold

 

By Ashutosh Pati and Abhijit Doshi

 

MUMBAI – After a record high in 2025 and the first quarter of this year, investment demand for gold in India is likely to slow down in the coming months, according to Harshal Barot, senior research consultant at global precious metals consultancy Metals Focus. Barot expects only marginal growth in investment demand for gold, including bars, coins, and exchange-traded funds, for the full year 2026.

 

"So what we think is yes, there might be profit taking happening, but that will be sort of more than offset by new buying so we just expect a marginal growth. But last year itself, Indian demand was the highest since 2012 investment demand, so it's going to surpass that," Barot told Informist in an interview.

 

The recent move by domestic mutual funds such as HDFC Mutual Fund ICICI Prudential to suspend lump sum subscriptions in gold ETFs will also have an impact. Barot believes this has been done to discourage large ticket consumption, which accounts for around 20-30% of inflows. "...this is just in a way to give a message that we are trying to reduce consumption and help the country reduce the CAD (current account deficit)," he said.

 

Barot expects demand for ETFs from retail investors to rise 2-3% this year as "price expectations have still not changed materially." People in India still expect prices to rise as there has been an increase in the import duty, coupled with concerns about the depreciation of the rupee, he said.

 

Jewellery demand in India has been going downhill since the last two-three years amid surging prices, with discretionary and daily-wear demand suffering the most. This can be termed a kind of "destruction of demand," he said. He expects Indian gold jewellery consumption to fall 6% on year in 2026, which is still a moderate fall compared to the last few years. However, Barot does not expect wedding-related gold purchases to decline.

 

"Jewellers and fabricators are shifting to more of 18 carat, 14 carat products, so 22 carat is losing market share. Although it still remains the largest category in India but relatively...it is losing market share. Even in the plain gold segment, we are seeing you know 18 carat acceptance now coming in certain parts of India," he said.

 

Indian consumers' budgets are usually fixed and with the sharp rise in gold prices, they would buy lower volumes. More people have also opted to exchange their old jewellery if they want a new design. "All those factors have been there which are creating pressure on gold jewellery demand. There is more gold plated silver jewellery that is becoming mainstream, so that is also becoming a competition...A lot of retailers are trying to push platinum products as well because they are higher margins," he said.

 

The government's decision to raise import duty on precious metals will have a negative impact in the short term. However, once the festive season arrives, demand should bounce back, Barot said.

 

Gold and silver prices had surged to record highs at the start of this year, but have corrected since. This is mainly because the war in West Asia has led to a significant rise in energy prices and stoked concerns about inflation and higher interest rates. Once the "cloud of the war" subsides, other uncertainties such as tariffs, fiscal deficits in major economies, and the risk of a correction in the US equity market could bring investors back to gold again.

 

Barot sees gold and silver prices surging to fresh record highs by the end of this year or in early 2027. "...fair to say over the next nine to 12 months, we see you know both of them coming back to new highs," he said.

 

Another reason he expects gold prices to resume their uptrend once the war is over that fundamental drivers of the price, such as strong demand from global central banks, remain in place. Barot believes central banks will be "substantial buyers" of the precious metal this year even though there is a slight possibility of a year-on-year fall.

 

"Certain countries are selling because of currency management pressures but we have seen a whole lot of new countries now buying gold. For example, last year South American countries like Brazil...started adding gold," he said. However, he cautioned that volumes may be lower on year. Even if these banks purchase 700-800 tonnes this year, it is still relatively higher than the pre-2022 levels of 400-500 tonnes. Global central banks bought around 1000 tonnes every year since 2022 when the Russia-Ukraine war had broken out, he said.

 

Asked if it the Reserve Bank of India should sell gold in the current situation, Barot said these decisions are driven by several factors and not just one. "...every central bank has a certain target in mind in terms of how much percentage they want to keep in gold...what could happen is that if they think that certain percentage has been achieved just because the price has risen they might stop adding because say for example if they are targeting 10% and you know you reach 10% just because of the price, then there's no need to incremental volumes, so a lot of central banks do that," he said.

 

Asked if central banks could move towards silver now since the Saudi central bank had purchased some silver ETFs last year, Barot said he does not see this becoming mainstream at any point. "Because silver, to be honest, is far more volatile and the fact that the market is not deep and liquid enough like gold for central bank-like institutions," he said.  End

 

Edited by Avishek Dutta

 

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