Gold jewellery sales in India remain subdued amid high prices and economic uncertainty

Gold jewellery sales in India during April and early May remained subdued, except on the day of Akshaya Tritiya, due to high and volatile gold prices coupled with broader economic uncertainties, according to a World Gold Council (WGC) report.

Anecdotal evidence suggests that consumers were deferring their purchases, waiting for price stability, or opting for lighter-weight jewellery to accommodate fixed budgets and need-based buying, WGC said.

Gold’s momentum accelerated in April, surging to a record high of US$3,500/oz and marking its fourth consecutive month of gains, with a 6% increase. The speed and sharp rise were fuelled by a weakening US dollar, heightened geopolitical and economic uncertainties, and strong inflows into global gold ETFs.

However, prices have since retreated, with the LBMA Gold PM price falling 8% so far in May. In India, domestic gold prices mirrored the global trend. Although the May m-t-d correction was milder at 5%, cushioned by the appreciation of the Indian rupee

WGC said that stability in gold prices could prompt a resurgence in demand. Consumer sentiment that the downside to gold prices is limited would reinforce gold’s appeal as a reliable investment.

So far in 2025, the LBMA gold price PM in USD has climbed by US$583/oz or 22%, to US$3,192/oz. The Indian domestic spot gold prices have also followed a similar trajectory, rising 23% y-t-d to Rs 93,407/10g. Despite the recent decline, gold outshines other major asset classes on a year-to-date basis

The festival of Akshaya Tritiya, which traditionally drives gold purchases, fell on 30 April this year. Overall demand during the festival was restrained and mixed as per market reports. While large and corporate retailers reported higher footfalls and sales – largely driven by aggressive promotional and marketing campaigns - small and independent jewellers experienced sharp declines in demand.

The bullion segment, bars and coins, performed better than jewellery, with low weight coins (especially 5g) proving popular. These were bought as ‘token’ purchases for the festival, with a notable share of sales occurring through online and e-commerce platforms. This behaviour highlights a growing consumer shift towards organised players and investment-oriented gold products, WGC said.

Regional trends also varied. The southern states recorded stronger sales compared to the other parts of the country, given the greater significance of Akshaya Tritiya in the region. A moderate performance followed this in the western parts of the country.

Despite a likely year-on-year decline in the volume of gold sold during Akshay Tritiya, the overall value of sales is expected to have increased, reflecting the nearly 30% rise in gold prices since last year. This indicates a degree of resilience in Indian gold demand. Additionally, the exchange and recycling of old gold jewellery remained a prominent trend.