New Delhi, Nov 5 (NationPress) The total consumer demand for gold in India surged to 802.8 tonnes in 2024, accounting for 26 percent of the global gold demand, placing India in the second position worldwide, just behind China, which had a consumer demand of 815.4 tonnes, as reported by SBI Research on Wednesday.

India's domestic gold supply is minimal when compared to the total demand, with imports making up approximately 86 percent of the total supply in 2024, according to estimates from the World Gold Council. Gold imports saw a remarkable increase of 31 percent in FY24 and 27 percent in FY25.

Nevertheless, rising prices have resulted in a decline in gold demand in 2025. In Q3 2025, the consumer demand for gold plummeted by about 16 percent year-on-year, primarily due to a decrease in jewellery demand, as highlighted by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI.

In addition, elevated prices have led to a 9 percent reduction in gold imports to $26.5 billion during the April-September period of FY26, down from $29 billion in the same timeframe in FY25.

“An intriguing trend is the rise in gold reserves by central banks. The RBI's gold reserves increased to 880 tonnes in 2025 as part of a strategic reserve management approach,” Dr. Ghosh noted.

The return on gold has been comparable to the equity market (Sensex) over periods of 5, 10, and 15 years; however, it significantly surpasses market returns over the 1-year and 3-year periods.

“Additionally, the recent discoveries of new gold mines in districts such as Deogarh, Keonjhar, and Mayurbhanj in Odisha (with an estimated 1,685 kg of gold ore identified by the GSI), along with potential quantities in Jabalpur, Madhya Pradesh, and Kurnool district in Andhra Pradesh (where India's first large private gold mine is expected to yield 750 kg of gold annually), could alleviate import pressures and positively impact our current account balance,” the report indicated.

The government initiated the issuance of Sovereign Gold Bonds (SGBs) in November 2015 and has continued with 67 tranches, the latest being issued in February 2024.

As of October 23, outstanding SGBs total 125.3 tonnes. Considering the redemption price of Rs 12,704 announced for the 2017-18 Series IV, the total cost to the government stands at Rs 1.59 lakh crore.

“When factoring in the issuance of these units, it amounts to Rs 65,885 crore. Therefore, it reflects a total loss of Rs 93,284 crore to the government due to the rise in gold prices,” the report concluded.