Gold Jewellery Demand Plummets 40% Amid Record Prices

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AuthorAarav Shah|Published at:
Gold Jewellery Demand Plummets 40% Amid Record Prices
Overview

Gold and silver jewellery sales in India saw a significant year-on-year decline in December 2025, with gold sales dropping 35-40% and silver jewellery down 15-20%. This sharp fall occurred despite record-high prices for precious metals on MCX, driven by global tensions. Demand for silver bars and coins, however, bucked the trend, rising 15-18%. High prices are deterring retail buyers, pushing them to defer purchases or seek alternative investment formats.

Gold and silver jewellery demand experienced a sharp contraction in December 2025, signaling a significant shift in consumer purchasing patterns amidst soaring prices.

Jewellery Sales Hit Hard

Sales of gold jewellery plummeted by 35-40% year-on-year for December 2025. Silver jewellery sales fared only slightly better, declining by 15-20% during the same period. These figures starkly contrast typical year-end demand, which usually surges 100% due to the wedding season in India.

November 2025 also saw a downturn, with gold sales down 35% and silver off by 10% compared to the previous year.

Divergent Demand for Bars and Coins

Despite the slump in jewellery, demand for physical silver in the form of bars and coins continued its upward trajectory, registering a 15-18% increase. This divergence suggests investors are prioritizing outright metal accumulation over decorative items, potentially viewing them as a more secure store of value during uncertain times.

Record Prices Deter Buyers

The primary driver for the weak jewellery sales is the record-high valuation of precious metals. Gold prices on MCX surged approximately 84% to ₹1,40,465 per 10 grams of 24-carat purity, while silver climbed nearly 178% to ₹2,54,174 per kilogram by December 26, 2025. Analysts attribute the decline to buyers' fear of overpaying and a preference for waiting for price consolidation or corrections.

Renisha Chainani, Head of Research at Augmont, noted that elevated prices divert investor interest toward exchange-traded products and digital investment formats, impacting traditional jewellery offtake. She also pointed to discretionary spending constraints and a potential front-loading of festive and wedding demand earlier in the year.

Outlook Remains Cautious

Global uncertainties and geopolitical tensions continue to support gold and silver as safe-haven assets. Analysts anticipate further price appreciation, potentially driven by ongoing geopolitical friction and expectations of central bank rate cuts. Fibonacci extensions suggest significant resistance levels for gold at $4,750 and $4,970, with support around $4,300. Silver could target $88.60, $99, and $107, finding strong support at $64.

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