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WGC reports that India's gold consumption will hit a 5-year low due to record prices affecting jewellery sales.

The World Gold Council announced on Thursday that India's gold demand in 2025 will be at a five-year-low, due to record high prices which are affecting jewellery purchases and overshadowing the slight increase in investment demand.

Sachin Jain is the CEO of WGC India operations. He said that the demand for gold in the second largest consumer of precious metals could be between 600 and 700 tons by 2025. This would be the lowest level since 2020 and down from the 802,8 tons of last year.

He said that if the price stabilizes, the demand could rise to 700 tons. However, a 10%-15% increase in the price due to geopolitical reasons may push it lower.

Gold prices in India, which reached a record of 101,078 rupies per 10 grams in the month of June, are up 28% in 2025 after a 21% increase in 2024.

The WGC reported that India's gold demand in the April to June quarter was down 10% on a year earlier, falling 17% from the previous quarter. However, investment demand increased 7%.

Jain stated that the demand for September is expected to be lower compared to last year, when New Delhi reduced import duties, which boosted purchases.

He said that the precious metal outperformed other asset classes and attracted investors who preferred both gold ETFs as well as physical gold.

He said that "Gold ETFs are at an important growth juncture in India, and they are becoming more popular and prominent as India becomes increasingly digitised."

Data from the Association of Mutual Funds in India earlier this month showed that gold ETFs in India experienced a tenfold increase in inflows month-on month to 20,81 billion rupees (US$237.5 million). This was a five-month record. $1 = 87.6390 Indian Rupees (Reporting and editing by Mrigank Dahniwala).

(source: Reuters)