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Informist, Thursday, Jul. 31, 2025

MUMBAI – Demand for gold jewellery in India is expected to remain subdued in the second half of 2025 as consumers are adapting less quickly to high prices than they have historically, the World Gold Council said in a report Thursday. "This theme is likely echoed in other regions. Flat or lower prices won't elicit the same response one might see in an environment where disposable income is solid. Thus, our expectation for weak full year jewellery demand remains in place," it said.

Even in the scenario where gold prices witness modest growth in the second half of the year, it is unlikely to produce much of a recovery in gold jewellery demand, "given that economic drivers are lacklustre in most regions", the council said.

The Indian economy is still vibrant but is expected to soften a little in the second half of 2025, it said. While a seasonal recovery in demand is likely in the third quarter because of a long line-up of festivals and the beginning of the wedding season, the continued high price environment looks set to put ongoing pressure on gold jewellery demand volumes in the country, the council said.

Jewellery retailers in China are also likely to face an equally glum second half. Chinese households continue to save at near-record levels, limiting discretionary spending on items like gold jewellery. Persistent weakness in the country's property market and external headwinds may continue to weigh on consumer confidence. Nonetheless, potential monetary easing and fiscal stimulus could offer some offsetting support and seasonality patterns suggest a gradual on-quarter recovery in Chinese gold jewellery consumption from the third quarter.

Apart from some near-term headwinds, global gold exchange-traded funds have further upside potential in the second half of the year. Retail investment has been solid and the council expects only a modest softening during this period while the demand from global central banks has also been revised down modestly.

"The prospects are encouraging for Indian gold investment to remain stable throughout of 2025. Economic indicators continue to paint a positive picture, with healthy rural demand, broad-based economic growth and, so far, good monsoon rainfall. Added to the potential for prolonged global trade disruption and outbreaks of heightened geopolitical tension, the supportive environment for gold investment in India is likely to persist," the council said.

Producers' margins increased in the first half of the year and will likely stay high. Ramp ups and new mine supply in Ghana, Canada, and Chile are likely to increase production to another record level in 2025, it said.  End

Reported by Ashutosh Pati

Edited by Ashish Shirke

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