Indian consumers spent a remarkable Rs 65,000 crore more on gold during the April-June quarter of 2026 compared to the previous year, despite actually purchasing a smaller physical volume of the precious metal. This striking paradox highlights how soaring gold prices are reshaping purchasing patterns in India, a nation with a deep cultural affinity for gold.
According to the World Gold Council's "Gold Demand Trends Q2 2026" report, total gold demand in India registered a nearly 6% year-on-year decline, falling to 131.4 tonnes from 139.7 tonnes. However, the total value of these purchases surged by an impressive 50%, reaching a record Rs 1.98 lakh crore, up from Rs 1.33 lakh crore in the corresponding period last year.
Record Prices Drive Shifting Consumer Habits
The primary driver behind this trend is the significant increase in gold prices. While the overall volume of gold purchased decreased, the higher per-unit cost meant consumers were spending substantially more to acquire less. Sachin Jain, Regional CEO for India at the World Gold Council, noted that consumers continue to prioritize gold even in a high-price environment, adapting their purchasing decisions to balance affordability with long-term value.
Jewellery Demand Adapts
India's jewellery demand saw a 15% year-on-year decline in volume, hitting 75.1 tonnes – the weakest April-June quarter since the pandemic. Yet, the value of these jewellery purchases climbed 34% to Rs 1,13,210 crore, directly reflecting the sharp rise in gold prices. To manage costs, many consumers opted for lighter-weight jewellery, lower-carat products, and utilized old-for-new exchange programs. Organized retailers observed a stronger demand for studded jewellery and lighter designs, particularly among urban buyers, while traditional 22-carat items saw comparatively weaker interest.
Resilient Investment in Gold
Despite the moderation in jewellery volumes, investment demand for gold remained robust. The report indicated a 9% year-on-year increase in bar and coin demand, reaching 50.3 tonnes. This suggests a notable shift among buyers towards investment-grade gold rather than purely ornamental purchases. Furthermore, Indian Gold Exchange Traded Funds (ETFs) attracted 4.2 tonnes of net inflows, contrasting with global gold ETFs which experienced outflows during the same quarter.
Investors largely maintained a positive outlook for gold, viewing price corrections, such as when domestic prices dipped below Rs 1.5 lakh per 10 grams in June, as opportune moments to accumulate more. This boosted demand for bars, coins, and digital gold products.
Looking Ahead: Festive Season and Prices
The trajectory for the second half of the year will largely hinge on two critical factors: prevailing gold prices and the upcoming festive season. Jewellers have already reported an uptick in buying activity in July, as consumers capitalized on slightly lower prices in anticipation of the wedding season. The World Gold Council anticipates that festive demand will provide crucial support in the coming months, though monsoon patterns and rural incomes will also play significant roles. The April-June quarter unequivocally demonstrates that even if Indians purchase fewer grams, their willingness to spend more to keep gold in their portfolios remains unwavering.