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.
