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Informist, Thursday, Sept. 17, 2026

 

NEW DELHI – Demand for gold jewellery in India has weakened in recent weeks as many customers delayed discretionary purchases after sharp price swings. However, wedding-related gold purchases have remained relatively resilient and are expected to improve as the festive and wedding season progresses, the World Gold Council said. Meanwhile, the investment demand for gold remained strong in August.

 

The initial momentum seen in mid-August has "softened over recent weeks", World Gold Council's Research Head for India Kavita Chacko said in a report. "The sharp gold price rally in August, followed by the subsequent pullback, has left many consumers in a wait-and-watch mode, delaying discretionary purchases," she added. 

 

Meanwhile, retailers are cautious and preferring to replenish inventories based only on realised demand, while some manufacturers reported delays in retailers' order uptake. Despite the recent moderation, the trade remains "cautiously optimistic" about demand during the peak festive and wedding season, she said.

 

Domestic gold prices rose 12% in August to INR 158,854 per 10 grams but gains were tempered as the rupee appreciated marginally. "Both international and domestic prices have pulled back in September, declining 3.9% and 4.6%, respectively, amid shifting expectations around Fed policy and softer global gold ETF flows," the report said. 

 

India's investor participation in gold exchange-traded funds has softened, with only 4,000 new accounts added in August, taking total folios to 12.54 million. This is notably lower than the average monthly increase of 330,000 from January to July. "This suggests that while existing investors continue to accumulate gold through ETFs, the pace of new investor entry has slowed," Chacko said. 

 

Inflows into Indian gold ETFs rose 67% on month to INR 25.97 billion in August, according to the Association of Mutual Funds of India data. Although inflows remain strong, they have moderated from earlier highs, reflecting periodic profit-taking and softer price momentum. Limits by several fund houses on large direct subscriptions may have also contributed to the slowdown in inflows.

 

IMPORTS DOWN

Gold imports declined sharply by 45% on month and 58% on year to $2.3 billion in August. Gross import volumes are estimated at around 15-20 tonnes. "This fall in imports suggests that existing domestic supply remained sufficient to meet expected demand," Chacko said. 

 

Domestic gold prices were below import parity amid adequate local supply, making imports unattractive. "Discounts widened from an average US$34/oz in July to US$51/oz in August and further to US$78/oz as of 11 September, leaving domestic prices trading nearly 2?low import parity or landed price," the report said. Increased old-gold exchanges for new have boosted local supplies, keeping domestic prices below the landed cost. Import parity, or landed price, is the international gold price adjusted for import tax.  End

 

US$1 = INR 95.93

 

Reported by Afra Abubacker

Edited by Himanshi Gupta

 

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