India’s gold demand falls 6 pc in April-June on weak seasonal demand, higher duty: WGC

India's gold demand declined 6% year-on-year to 131.4 tonnes in Q2 2026 due to higher prices, customs duty increase and reduced purchases. Despite lower volumes, gold demand value hit a record level as consumers continued investing, with festive demand expected to support future consumption

Mumbai: India’s gold demand fell 6 per cent year-on-year to 131.4 tonnes in the April-June quarter, weighed down by seasonally subdued sales, higher Customs duty and Prime Minister Narendra Modi’s appeal to reduce purchases of the precious metal, the World Gold Council said in a report.

The total demand was at 139.7 tonnes during the corresponding period last year, according to WGC’s ‘Q2 2026 Gold Demand Trends’ report.

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“However, it’s been a record in terms of the value of demand. So, consumption was Rs 1,98,100 crores, compared with Rs 1,32,500 crores in the same period in 2025, which is up by 50 per cent compared to the second quarter of 2025, highlighting that consumers continue to prioritise gold even in a high-price environment,” WGC Regional CEO, India, Sachin Jain told PTI.

Going forward, for the year, WGC estimated the demand to stay between 650 and 750 tonnes.

“We still see demand in the range of 650 to 750 tonnes for this year. However, given the current geopolitical landscape, interest rates, and inflation, I think we should be somewhere in the middle of this range. If there is more correction in gold prices and the customs duty is reduced, then we could get to the upper end of this range,” Jain added.

Total Jewellery demand in India during the quarter under review decreased by 15 per cent to 75.1 tonnes as compared to 88.8 tonnes in the same period last year.

“Subdued season, the clarion call of the Prime Minister to buy less gold and hike in Customs Duty, among others, impacted the demand,” he added.

Prime Minister Modi, in May this year, urged people to reduce non-essential gold purchases and explore other ways to save foreign exchange reserves amid mounting import bills of the country due to volatile crude oil prices.

Jain expressed concern about a rise in grey marketing after the duty hike, noting reports of illicit gold already making its way into these markets.

“We think smuggling and illicit gold making way into the market is the biggest risk to the industry, and we are already getting reports on this. We will be tracking this in the coming quarters,” he added.

Meanwhile, investment demand remained encouraging, with bar and coin demand growing 9 per cent year-on-year to 50.3 tonnes, while Indian Gold ETFs attracted 4.2 tonnes of net inflows despite global outflows.

“These trends reinforce gold’s growing appeal not only as a traditional store of wealth but also as a strategic investment that provides stability and diversification in an increasingly uncertain economic environment. Looking ahead, the festive and wedding season in the second half is expected to support demand. While elevated prices may continue to influence buying patterns, Indian consumers have consistently demonstrated their ability to adapt,” Jain said.

Meanwhile, the WGC data showed that total gold recycled in India in the April-June quarter declined by 17 per cent to 19.2 tonnes, compared to 23.1 tonnes in the same period last year.

Total gold imports in India in the second quarter of 2026 were 98.1 tonnes, down by 23 per cent compared to 127.4 tonnes recorded in the corresponding period of 2025.

The average gold price in the second quarter was USD 4,506.3 an ounce in comparison to USD 3,280.4 in the corresponding period of 2025.

In India, the average quarterly price of gold during April-June was Rs 1,50,744.8 (without import duty and GST) in comparison to Rs 94,875.9 in the same period last year.