Why Did Gold Demand in India Decline by 16% in Q3 2025?
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Synopsis
Gold demand in India has dipped significantly in Q3 2025, driven by rising prices. How will this impact future investments and consumer behavior? Discover the dynamics behind these trends and what experts predict for the gold market in the upcoming festive season.
Key Takeaways
- Gold demand in India decreased by 16% year-on-year in Q3 2025.
- Jewellery demand fell by 31% by volume.
- Investment in gold coins and bars rose by 20%.
- Gold prices increased by 46% to Rs 97,075 per 10 grams.
- Imports of gold declined by 34% in the same period.
New Delhi, Oct 30 (NationPress) The demand for gold in India witnessed a notable decline of 16% year-on-year, reaching 209.4 tonnes during the July-September quarter, primarily attributed to a significant increase in prices, which surged by 23%, as per data released by the World Gold Council on Thursday.
During this period, the demand for jewellery saw a dramatic drop of 31% by volume, while the interest in gold investments, particularly in coins and bars, rose by 20%, according to the report.
As of Thursday, the price of 24-carat gold (1 gram) stood at Rs 11,962, a slight increase from Rs 11,935 the previous day, based on the data from the India Bullion and Jewellers Association (IBJA).
In terms of value, jewellery expenditure remained almost unchanged at Rs 1.14 lakh crore, whereas gold investments saw a remarkable increase of 74% to Rs 88,970 crore.
The price of gold, excluding import duty and GST, skyrocketed by 46%, reaching Rs 97,075 per 10 grams in the September quarter, compared to Rs 66,614 in Q3 2024. This dramatic price increase has affected consumer sentiment, leading to a 34% decrease in imports, which fell from 308 tonnes to 195 tonnes.
According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, "Gold prices remained volatile with slight gains, as the US Fed’s rate cut did not significantly boost sentiment, primarily due to expectations. Nonetheless, bullish sentiment persisted in the bullion market after US President Donald Trump suggested the possibility of nuclear weapons testing amidst ongoing nuclear activities by other nations."
Trivedi also indicated that gold is likely to stay volatile, fluctuating between Rs 1,18,000 and Rs 1,24,500 in the near future.
Looking ahead, analysts anticipate a recovery in jewellery demand during the December quarter, spurred by a robust Dhanteras and Diwali season, with foot traffic expected to rise by 15%.
Point of View
It is crucial to provide our audience with accurate and unbiased insights into market trends. The significant decline in gold demand amid rising prices highlights the delicate balance between consumer sentiment and investment strategies. We will continue to monitor these developments closely, ensuring our readers are well-informed.
NationPress
02/11/2025
Frequently Asked Questions
What caused the decline in gold demand in India?
The decline was primarily due to a sharp increase in gold prices, which surged by 23%, leading to a 16% year-on-year drop in demand.
How much did jewellery demand fall?
Jewellery demand fell by 31% by volume during the July-September quarter.
What is the current price of 24-carat gold?
As of Thursday, the price of 24-carat gold is Rs 11,962 per gram.
What does the future hold for gold prices?
Analysts predict gold will remain volatile, with prices expected to fluctuate between Rs 1,18,000 and Rs 1,24,500.
Will jewellery demand recover?
Yes, analysts forecast a recovery in jewellery demand during the December quarter, supported by a strong festive season.
