India's gold demand fell 6% year-over-year to 131.4 tonnes in April-June, hit by a subdued season, a higher Customs duty and Prime Minister Narendra Modi's appeal to buy less. In value terms the quarter set a record, with consumption at ₹1,98,100 crore. The World Gold Council still puts full-year demand between 650 and 750 tonnes.
India's gold demand fell 6% year-over-year to 131.4 tonnes in the April-June quarter, weighed down by seasonally subdued sales, higher Customs duty and Prime Minister Narendra Modi's appeal to reduce purchases of the precious metal, the World Gold Council said in a report. Total demand stood at 139.7 tonnes during the corresponding period last year, according to the WGC's 'Q2 2026 Gold Demand Trends' report.
Consumption value sets a record
But in value terms the quarter set a record. Consumption reached ₹1,98,100 crore, up 50% from ₹1,32,500 crore in the second quarter of 2025, WGC Regional CEO, India, Sachin Jain told PTI, which he said highlights that consumers continue to prioritise gold even in a high-price environment.
The average gold price in the second quarter was $4,506.3 an ounce, against $3,280.4 in the corresponding period of 2025. In India, the average quarterly price during April-June was ₹1,50,744.8 without import duty and GST, compared with ₹94,875.9 a year earlier.
Jewellery demand drops 15%
Jewellery demand decreased by 15% to 75.1 tonnes as compared to 88.8 tonnes in the same period last year. Jain pointed to the subdued season, the Prime Minister's clarion call to buy less gold and the hike in Customs Duty, among others.
Modi, in May this year, urged people to reduce non-essential gold purchases and explore other ways to save foreign exchange reserves amid mounting import bills owing to volatile crude oil prices. Recycled gold in India declined by 17% to 19.2 tonnes from 23.1 tonnes, while imports in the second quarter of 2026 came to 98.1 tonnes.
Investment demand grows as smuggling risk looms
Bar and coin demand grew 9% year-on-year to 50.3 tonnes, and Indian Gold ETFs attracted 4.2 tonnes of net inflows despite global outflows. Jain expressed concern about a rise in grey marketing after the duty hike, noting reports of illicit gold already making its way into those markets. According to Jain: "We think smuggling and illicit gold making way into the market is the biggest risk" to the industry, and the WGC will be tracking this in the coming quarters.
For the year, the WGC estimated demand to stay between 650 and 750 tonnes. Given the current geopolitical landscape, interest rates and inflation, Jain said he thinks the figure should land somewhere in the middle of that range, and that more correction in gold prices alongside a reduced customs duty could take it to the upper end. He added that the festive and wedding season in the second half is expected to support demand.
Source: The Hindu
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