India Gold Demand Decline : The continuous rise in gold prices in India is now affecting demand for the precious metal. With gold becoming increasingly expensive, people are avoiding jewellery purchases. Buying gold for investment has also weakened. According to estimates by the World Gold Council (WGC), India's total gold demand could fall to around 650 metric tonnes in 2026. If this happens, it would be the lowest demand recorded since the Covid-19 pandemic.

Demand May Hit Lowest Level In Six Years
The World Gold Council made this forecast in a report released on Tuesday. Earlier, gold purchases were severely affected in 2020 during the Covid-19 pandemic and lockdowns. Demand fell sharply at that time as jewellery shops remained closed. Now, in 2026, demand could once again approach those levels. According to Sachin Jain, CEO of the World Gold Council's India operations, jewellery demand has remained weak during the first nine months of the year.

Gold Demand Falls 29 Per Cent In September Quarter
The decline in gold demand was also reflected in the figures for July to September. During this period, India's total gold demand fell 29 per cent year-on-year to 162.5 metric tonnes. Jewellery purchases declined by 20 per cent, while demand for gold as an investment dropped by 40 per cent. This indicates that people are becoming reluctant to buy gold not only for jewellery but also for investment purposes.

Inflation And Expensive Gold Strain Budgets
According to the World Gold Council, high gold prices are a major reason behind the decline in demand. The rising cost of living following the Iran war has put additional pressure on household budgets. As a result, people are unable to spend as much on gold as they did earlier. Many customers are postponing jewellery purchases, while some are opting for lighter jewellery. This is directly affecting the jewellery business.

Weak Monsoon Reduces Rural Gold Purchases
More than half of India's total gold demand comes from rural areas. In villages, people consider gold not only as jewellery but also as a form of savings and wealth. However, a weak monsoon in 2026 has put pressure on the rural economy. According to the report, monsoon rainfall this year was at its lowest level in more than a decade. This affected agriculture and farmers' incomes. With earnings under pressure, rural households are cutting down on spending on gold purchases.

Festivals And Weddings Raise Hopes, Imports Also Decline
Amid weak demand, the Diwali, Dhanteras and wedding seasons are expected to provide some relief. Buying gold on these occasions is considered auspicious in India, often leading to an increase in jewellery purchases. However, high prices and weak rural incomes could limit this growth. Meanwhile, India's official gold imports also declined during the September quarter. According to Sachin Jain, one possible reason is that higher import duties may have encouraged increased gold inflows through unofficial channels. Therefore, a decline in official imports does not necessarily mean that the overall availability of gold in the market has fallen by the same extent.