Indian Investors Buy Record Gold Bars and Coins as Prices Surge

The World Gold Council has reported that Indian investors bought gold bars and coins totaling a record $10 billion during the September quarter. This significant increase in investment demand pushed its share of total gold consumption to an all-time high, as investors increasingly view gold as a mainstream asset for diversifying their portfolios. Sachin Jain, CEO of WGC's India operations, noted that investor interest in gold is expected to continue growing.

Investment demand saw a year-on-year jump of 20% in the September quarter, reaching 91.6 metric tons. In value terms, this demand climbed 67% to $10.2 billion. Conversely, overall gold consumption declined by 16% to 209.4 tons because jewelry demand slumped by 31% to 117.7 tons, primarily due to record-high prices. Local gold prices touched a peak of 132,294 rupees per 10 grams earlier this month and have risen 56% year-to-date in 2025, following a 21% increase last year.

Investment demand accounted for 40% of total gold consumption in the first nine months of 2025, marking a new record. Physically backed gold exchange-traded funds (ETFs) are also gaining traction, with record monthly inflows of 83.63 billion rupees in September, according to the Association of Mutual Funds in India.

Sachin Jain anticipates demand to grow further in the December quarter, supported by festivals and the wedding season. However, he projects total gold demand for 2025 to be between 600-700 metric tons, potentially the lowest since 2020.

Impact: This trend signifies a crucial shift in investor behavior in India, with gold becoming a key investment asset for diversification and a hedge against price volatility. The high prices are impacting traditional jewelry consumption, while boosting investment vehicles like bars, coins, and ETFs. This can influence overall capital allocation and market sentiment. Rating: 7/10

Difficult Terms: World Gold Council: An international industry body that represents the global gold industry and provides market insights and research. Metric Tons: A unit of weight equal to 1,000 kilograms. Physically Backed Gold Exchange-Traded Funds (ETFs): Investment funds traded on stock exchanges that hold physical gold bullion as their underlying asset, allowing investors to buy gold indirectly.