More Stories

Informist, Friday, Mar. 20, 2026

 

MUMBAI – Demand for gold in India could see a recovery around key festivals in April and the wedding season in smaller towns, but the overall buying interest will depend on prices of the yellow metal, according to Kavita Chacko, research head, India at the World Gold Council.

 

Consumer demand for gold remained subdued despite the recent pullback of prices from record highs. "Buying interest was stronger during the earlier price uptrend – particularly on the investment side (bars and coins) – but has since softened amid heightened price volatility, leading consumers to defer purchases," Chacko said.

 

Seasonal and financial factors further weighed on demand. March is typically a softer month, marked by financial year-end closures and related statutory payments and tax outflows, which constrain liquidity for both consumers and retailers. Some retailers have reportedly liquidated inventory to meet tax obligations, she said.

 

However, the underlying trends remain constructive. "Affluent consumers, who are relatively less sensitive to price levels, continue to support jewellery demand," Chacko said. Retailers have also reported interest from younger buyers, mostly for lightweight, contemporary, and predominantly plain gold jewellery, of 22- and 18-carat. "Importantly, there is only limited evidence of profit-booking-driven liquidation, suggesting that sentiment towards gold remains positive, even as consumers gradually adjust to a higher price base," she said. Retailer purchases have mainly been linked to store expansion and inventory requirements, rather than demand-led restocking.

 

Gold prices have pulled back from January-end highs, pressured by a stronger dollar and a rise in US treasury yields. Moreover, outflows from gold exchange-traded funds, mainly in the US, further weighed on prices. "Domestic gold prices diverged from international trends during February, declining 3.5% even as international prices gained 5%," she said. This was due to the appreciation of the rupee against the dollar and fewer revisions in the customs tariff value.

 

Inflows into gold ETFs remained positive in February for the tenth straight month, but at a slower pace. Net inflows were at $579 million. "In February, Securities and Exchange Board of India (SEBI) introduced new rules allowing actively managed equity mutual funds to invest part of their residual portfolio allocation (up to 35% of assets beyond core equity exposure) in gold and silver ETFs, giving fund managers greater flexibility in portfolio diversification," Chacko said. This could potentially lead to incremental institutional flows into gold ETFs.

 

India's gold imports moderated in February from the previous month, reflecting weak demand amid high prices and volatility. However, on a yearly basis, imports were significantly higher at 224% in value terms and over 80% in volume terms, she said. "At US$7.5bn, imports were 38% lower m/m but ~31% higher than the trailing 12-month average, indicating that underlying demand prevails despite likely price-led moderation in buying activity."  End

 

US$1 = INR 93.71

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 /+91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.