New Delhi: Elevated
gold prices led to a 15% decline in global gold jewellery consumption by volume
in FY 2025, marking a significant drop. This decline further worsened,
increasing by 17% year-on-year (YoY) in FY 2026, according to the joint report
by ICRA and Assocham. However, despite this sharper decline, gold investment
surged strongly, with even economic uncertainties failing to weaken its
momentum.
The report highlighted the significant
investment-led demand in the gold market, with a growing appetite for gold
bars, coins, and exchange-traded funds (ETFs). These surged by 74% in FY 2025
and by 60% YoY in H1 FY 2026.
The report suggested that persistent
economic uncertainties and geopolitical tensions had driven investors toward
gold, making the precious metal a safe-haven asset. It also underlined central
banks' gold-buying behaviour, a recurring pattern over the years to diversify
reserves and preserve value, thus supporting global gold prices."
It stated that although rising gold prices
have lessened consumer demand for jewellery globally, stronger investment in
gold had offset the decline in demand to a greater extent.
India, however, weathered the global
consumption decline and became the world’s largest gold jewellery consumer in
FY 2025, surpassing China. Despite this, persistent high prices led to a 7%
decline in jewellery demand during FY 2025, with a sharper drop of around 26%
YoY in H1 FY 2026.
The relaxation of custom duties on imports
in July 2024, from 15% to 6%, provided temporary relief for the jewellery
industry, improving consumer sentiment positively. However, domestic prices
soon rebounded in line with global trends.
The depreciation of the Indian rupee
against the US dollar caused domestic prices to rise at a faster pace, with a
10% increase in FY 2024, 30% in FY 2025, and 52% in the 9M of FY 2026.
