This Festive Season Gold Demand Falls Over 25% Amid Buyers Cut Back

Gold demand in India declined significantly during the initial phase of the festive season. The India Bullion & Jewellers Association (IBJA) reported a 28% drop compared to the previous year, marking the sharpest fall in 3 years. The rise in gold prices is being blamed for reduced consumer interest, with many buyers opting for lighter and lower-karat jewellery.

Changing Consumer Preferences

Jewellers observed that high prices and price volatility discouraged purchases, with many customers preferring affordable options. The average weight of lightweight jewellery has decreased from 7–12 grams to 7–10 grams. As per news reports, Surendra Mehta, national secretary of IBJA, stated, “High prices are denting demand. What is keeping the consumer away is the volatility in price. It is not stabilising.”

Ramesh Kalyanaraman, executive director of Kalyan Jewellers, noted that “With gold prices the way they are, the 18K range enables us to offer customers the same classic, heavy designs, in a more affordable and accessible format.” Urban markets and northern regions are showing stronger interest in lower-karatage items.

Investment Demand and Market Outlook

As per news reports, while jewellery purchases have declined, investment in gold remains steady. Keyur Shah, CEO of Muthoot Exim, said, “2–5 gm coins and 5–10 gm jewellery see the strongest demand among its low- to mid-income clients.” Customers sometimes opt for smaller sizes when prices rise unexpectedly.

On the other hand, Malabar Gold recorded a 5% rise in volume and 27% growth in value ahead of the main festive season. Chairman MP Ahammad added, “With GST reforms likely to boost overall consumption and ease inflation, we expect consumer sentiment to become stronger during Navratri and Diwali.”

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

Conclusion 

Despite falling jewellery demand, investment in gold remains stable, with customers choosing smaller coins or lighter pieces. Jewellers are adapting by offering more affordable options like 18K and 9K designs. Experts expect consumer sentiment to improve during Navratri and Diwali, supported by GST reforms and eased inflation pressures.

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