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India's Gold Demand Expected to Hit Six-Year Low in 2026 Due to Rising Prices
Sentiment: NeutralHigh Priority
What Happened?
India's gold demand is projected to fall to its lowest level in six years in 2026, driven by high prices affecting jewellery sales and investment. The World Gold Council cites rising living costs and a weak monsoon as contributing factors.
Key points
- India's gold demand is expected to drop to around 650 metric tons in 2026.
- This would be the lowest demand since 2020, when the COVID-19 pandemic affected sales.
- Gold demand fell 29% year-on-year to 162.5 metric tons in the September quarter.
- Jewellery purchases declined by 20%, while investment demand dropped by 40%.
- High prices and a weak rural economy are likely to limit demand.
- More than half of India's gold demand comes from rural areas.
Key insights
- The rise in gold prices may lead to a shift in consumer purchasing behavior towards more affordable alternatives.
- Weak agricultural performance due to poor monsoon could exacerbate economic challenges in rural areas.
- The upcoming festive season may provide a temporary boost to gold purchases, but overall demand remains uncertain.
Why it matters
The decline in gold demand could impact the livelihoods of those dependent on jewellery sales, especially in rural areas.
Entities
World Gold Council· OrganizationIndia· Country
Source
Business Standard
