India Gold Demand Falls 6% in Q2 2026 as Higher Duty and Seasonal Slowdown Weigh

The report showed that total gold demand stood at 131.4 tonnes during the quarter under review, compared with 139.7 tonnes in the corresponding period last year.

Despite the decline in volume, the value of gold demand reached a record level. WGC Regional CEO, India, Sachin Jain told PTI that gold consumption was valued at Rs 1,98,100 crores during the April-June quarter, compared with Rs 1,32,500 crores in the same period of 2025, marking an increase of 50 per cent year-on-year.

“However, it’s been a record in terms of the value of demand. So, consumption was Rs 1,98,100 crores, compared with Rs 1,32,500 crores in the same period in 2025, which is up by 50 per cent compared to the second quarter of 2025, highlighting that consumers continue to prioritise gold even in a high-price environment,” Jain said.

Looking ahead, the WGC estimated India's gold demand for the full year to remain between 650 and 750 tonnes.

“We still see demand in the range of 650 to 750 tonnes for this year. However, given the current geopolitical landscape, interest rates, and inflation, I think we should be somewhere in the middle of this range. If there is more correction in gold prices and the customs duty is reduced, then we could get to the upper end of this range,” Jain added.

Jewellery demand in India during the April-June quarter fell 15 per cent to 75.1 tonnes from 88.8 tonnes recorded in the corresponding period last year.

Jain attributed the decline to multiple factors. “Subdued season, the clarion call of the Prime Minister to buy less gold and hike in Customs Duty, among others, impacted the demand,” he said.

Prime Minister Narendra Modi, in May this year, urged people to reduce non-essential gold purchases and explore other ways to save the country's foreign exchange reserves amid mounting import bills caused by volatile crude oil prices.

Jain also expressed concern over increasing grey market activity following the Customs duty hike, saying reports had already emerged of illicit gold entering these markets.

“We think smuggling and illicit gold making way into the market is the biggest risk to the industry, and we are already getting reports on this. We will be tracking this in the coming quarters,” he added.

Meanwhile, investment demand remained encouraging. Demand for gold bars and coins increased 9 per cent year-on-year to 50.3 tonnes, while Indian Gold ETFs recorded net inflows of 4.2 tonnes despite global outflows.

“These trends reinforce gold’s growing appeal not only as a traditional store of wealth but also as a strategic investment that provides stability and diversification in an increasingly uncertain economic environment. Looking ahead, the festive and wedding season in the second half is expected to support demand. While elevated prices may continue to influence buying patterns, Indian consumers have consistently demonstrated their ability to adapt,” Jain said.

The WGC data also showed that total recycled gold in India declined 17 per cent during the April-June quarter to 19.2 tonnes, compared with 23.1 tonnes in the same period last year.

Gold imports into India during the second quarter of 2026 stood at 98.1 tonnes, down 23 per cent from 127.4 tonnes recorded in the corresponding quarter of 2025.

The average international gold price during the second quarter was USD 4,506.3 an ounce, compared with USD 3,280.4 in the corresponding period of 2025.

In India, the average quarterly gold price during April-June stood at Rs 1,50,744.8, excluding import duty and GST, compared with Rs 94,875.9 in the same period last year.

The latest WGC figures highlight that while higher prices, increased Customs duty, and seasonal factors weighed on physical gold demand, record spending, stronger investment demand, and expectations of support from the upcoming festive and wedding season continue to shape India's gold market outlook.