Despite Prime Minister Narendra Modi’s public call in May to avoid gold buying and the import duty hike, the gold demand in the June quarter went up by 50 per cent in value terms to Rs 1.98 lakh crore as customers bought 131.4 tonnes of gold. Gold bar and coin demand was up by 9 per cent in the quarter.

In volume terms, demand for gold for the June quarter was at 131.4 tonnes, down by 6 per cent against 139.7 tonnes in the year-ago quarter as the import duty on the metal was increased from 6 per cent to 15 per cent to curb the metal imports. The government anticipated a foreign exchange crunch amid the West Asia crisis and asked the people not to buy gold for a year.

However, this did not deter the amount spent on gold in the last quarter, which went up 50 per cent to Rs 1.98 lakh crore against Rs 1.32 lakh crore in the same quarter last year, as per the data of World Gold Council. Higher prices and import duties also contributed to the growth.

While jewellery demand was down by 15% to 75.1 tonnes against 88.8 tonnes in the year-ago quarter, bar and coin purchases went up by 9 per cent to 50.3 tonnes, in line with the trend in the previous quarters.

Global jewellery demand too remained under pressure in Q2, falling to 278 tonnes as elevated prices continued to constrain affordability, and encouraged consumers to reduce purchase weights. The weakness was broad-based, with China and India again accounting for much of the decline.

Value-wise, bar and coin demand was up 73 per cent as people remained optimistic about the importance of gold as an inflation hedge and an investment asset. Gold ETF demand also was up 49 per cent to 4.2 tonnes. WGC finds that globally, Investment would be the main driver of gold demand growth through the remainder of 2026.

Despite the efforts by jewellers to bring old gold into the market, recycled gold was down 17 per cent to 19.2 tonnes. Due to high duties, gold imports were down 23 per cent to 98.1 tonnes.

“The total value of demand rose by an impressive 50% to a record ₹198,100 crores, highlighting that consumers continue to prioritise gold even in a high-price environment. They are adapting their purchasing decisions to balance affordability with long-term value. This shift was particularly evident in the jewellery market. Although volumes declined to around 75 tonnes, jewellery demand in value terms grew 34% to Rs 113,210 crores, supported by seasonal buying during festivals like Akshaya Tritiya, Gudi Padwa etc,” said Sachin Jain, Regional CEO, India, World Gold Council.

The pullback in prices in mid-June to below the psychologically important
Rs150,000/10g signalled an important buying opportunity, sparking a pick-up in activity. This was also reflected in demand for digital gold products, which rebounded in June, finds WGC.

Looking ahead, WGC finds that 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. WGC estimates full year demand to be in the range of 650-750 tonnes.

Courtesy : Deccan Chronicle