Investment demand for gold in India surpassed jewellery consumption for the first time during the March quarter of 2026, as consumers delayed jewellery purchases amid volatile prices. Instead, they turned to investment options like gold exchange-traded funds (ETFs).
According to the World Gold Council’s demand trends report for Q1, investment demand surged by 54% year-on-year, reaching 82 tonnes, while jewellery demand fell by 19% to 66 tonnes. The decline in stock markets and the increased volatility in equities led investors to seek refuge in gold, investing more when prices dropped.
This shift was influenced by a dramatic rise in domestic gold prices, which increased by 81% year-on-year to record levels, impacting jewellery affordability while enhancing gold’s appeal as a safe-haven investment.
Overall, gold demand in India rose by 10% to 151 tonnes in Q1 2026, with its value nearly doubling to a record ₹2.27 lakh crore due to elevated prices. Investment demand was primarily driven by record inflows into gold ETFs, which rose nearly six-fold to ₹30,000 crore, with volumes increasing threefold to 20 tonnes. In addition, strong purchases of bars and coins accounted for 62 tonnes, nearly equal to jewellery demand.
Digital gold purchases via UPI remained robust, with gross purchases of ₹7,000 crore in January and February. India represented 32% of global ETF demand in Q1, trailing only China, as noted by Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions.
In contrast, jewellery demand decreased by 19% to 66 tonnes, though it increased by 47% in value terms to ₹99,920 crore, reflecting volatile prices that reached record highs in the March quarter.
The World Gold Council estimates that full-year demand could range between 650-750 tonnes, compared to 768 tonnes in 2026, with investment demand remaining a crucial factor in India’s gold market due to macroeconomic uncertainty and fluctuating equity markets.
Gold prices surged by 81% to ₹1.51 lakh per 10 grams, up from ₹83,375 last year. Despite elevated prices, gold imports rose by 39% to 196 tonnes compared to 141 tonnes, as prices soared to $4,873 per ounce from $2,680.
Sachin Jain, Regional CEO for India at the World Gold Council, stated that the trends observed in the domestic gold market during the March quarter display a continued disconnection between volume and value growth, primarily driven by record-high prices and shifting consumer preferences.
He noted that high prices have constrained jewellery demand, particularly in price-sensitive segments. Investment demand has become a significant factor in overall growth, reflecting a growing confidence in gold as a strategic asset amidst global uncertainties and its ability to hedge against inflation and market volatility.
While high prices may pose a short-term challenge for jewellery demand, the upcoming summer wedding season and regional festivals are expected to help sustain growth, building on the momentum observed during Akshaya Tritiya.
Globally, gold demand decreased by 9% to 1,196 tonnes, down from 1,316 tonnes, while central bank purchases rose by 3% to 244 tonnes, compared to 237 tonnes previously.
Published on April 29, 2026.
