India's Gold Demand Drops 16% by Volume in Q3 2025 Amid Record Prices; Investment Buying Surges

India's gold demand experienced a significant 16% year-on-year decline in volume during the third quarter of 2025, reaching 209.4 tonnes compared to 248.3 tonnes in the same period last year. This decrease was mainly driven by record-high gold prices, which deterred consumers from making jewellery purchases, the segment that constitutes the majority of India's gold consumption. Jewellery demand plummeted by 31% to 117.7 tonnes.

Despite the drop in volume, the total value of gold demand saw a substantial 23% jump to Rs 2,03,240 crore, a rise attributed to a sharp increase in gold prices. The average gold price in India climbed 46% to Rs 97,074.9 per 10 grams in the quarter.

Conversely, investment demand demonstrated robust performance, with volume increasing by 20% to 91.6 tonnes and value surging by 74% to Rs 88,970 crore. This trend highlights gold's perceived role as a long-term store of value among Indian consumers. Gold imports also fell by 37%, reflecting lower consumption.

The World Gold Council (WGC) forecasts India's total gold demand for 2025 to be between 600 and 700 tonnes. Early signs of recovery were noted in October, fueled by the festive and wedding season.

Impact: This news directly impacts the Indian commodity market, particularly gold prices and trading volumes. It also reflects consumer spending behaviour and investment strategies in India, which can indirectly influence sectors related to consumer goods and financial services. The report signals a shift where physical retail purchases are being outpaced by investment-driven demand due to high prices. Rating: 7/10.

Heading: Key Terms and Their Meanings World Gold Council (WGC): An international industry body that promotes the use and investment in gold. Tonnes: A unit of weight, equal to 1,000 kilograms. Jewellery Demand: The amount of gold purchased for making ornaments and jewellery. Investment Demand: The amount of gold purchased in forms like bars, coins, or through financial instruments for investment purposes. Recycling: Gold recovered and reprocessed from old jewellery or scrap. GST: Goods and Services Tax, a consumption tax in India. Per capita income: The average income per person in a country. Disposable income: Income remaining after taxes and essential expenses, available for spending or saving.