India’s Gold Demand in 2025 to Hit 5-Year Low Amid Record Prices

India’s appetite for gold is expected to dip in 2025, reaching its lowest point in 5 years. Driven by record-high prices, jewellery consumption is weakening despite a modest rise in investment demand. The World Gold Council estimates consumption between 600 to 700 metric tons, dropping from 802.8 tons last year.

Gold Demand Drops Sharply Amid Soaring Prices

India’s gold demand in 2025 is predicted to fall between 600 and 700 tons, marking the lowest annual total since 2020. This is primarily attributed to a major slump in jewellery sales as soaring prices deter retail buyers. Local gold prices hit ₹101,078 per 10 grams in June 2025, representing a sharp 28% surge year-to-date, following a 21% rise in 2024.

Jewellery Sales Fall Despite Investment Uptick

In the April to June quarter of 2025, overall gold consumption in India dropped 10% year-on-year to 134.9 tons. Jewellery demand dropped 17% during the same period, while investment demand rose by 7%. Despite urban investors increasing their exposure to gold, it hasn't been enough to offset the sharp drop in jewellery buying, especially in price-sensitive rural markets.

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Gold ETFs See Increasing Interest

With gold continuing to outperform other asset classes, exchange-traded funds (ETFs) are gaining traction among Indian investors. Monthly inflows into gold ETFs surged to ₹20.81 billion ($237.5 million) in June 2025, the highest in five months. India’s ongoing digitisation is helping introduce these alternative investment routes to a wider investor base.

Outlook for Remaining Quarters

Demand in the September 2025 quarter is expected to soften compared to last year’s 248.3 tons, when lower import duties had temporarily encouraged buying. If geopolitical risks continue to inflate gold prices by another 10% to 15%, full-year demand may settle near the lower end of the forecasted range.

Conclusion

India’s gold demand faces a downturn in 2025, driven by record-high prices that are discouraging jewellery purchases. Modest investment growth and rising ETF popularity offer some support, but are unlikely to fully offset the decline in retail consumption. Continued price volatility will be key to future buying trends.

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