India Gold Demand May Hit Six-Year Low In 2026 As High Prices, Weak Monsoon Hurt Jewellery Sales: World Gold Council

India's gold demand could decline to its lowest level in six years during 2026 as elevated prices, weaker jewellery purchases and slowing investment demand affect consumption, according to the World Gold Council (WGC).

As per a Reuters report, the world's second-largest gold consumer after China is facing pressure from rising living costs and reduced rural purchasing power following a weak monsoon.

Total gold demand could fall to approximately 650 metric tonnes, its lowest level since 2020, WGC said. That year, Covid-related restrictions forced jewellery stores to close, significantly affecting purchases.

India's gold consumption dropped 29% year-on-year to 162.5 metric tonnes during the September quarter.

Jewellery demand declined 20%, while investment demand fell 40%, Jain said.

Weak jewellery sales during the first nine months of 2026 are expected to weigh on annual consumption.

High gold prices have made purchases more expensive for households already dealing with increased living costs following the Iran war.

The slowdown has been particularly significant for rural consumers, who account for more than half of India's gold demand.

Jewellery traditionally serves as a store of wealth for millions of rural households.

However, the country's weakest monsoon rainfall in more than a decade has affected agricultural production and reduced farmers' incomes.

The WGC expects some improvement in gold purchases during the December quarter, supported by festivals and the wedding season.

Dussehra celebrations in October and Diwali in early November traditionally encourage gold buying, which many households consider auspicious.

Nevertheless, the council cautioned that elevated prices and weakness in the rural economy could restrict any recovery.

Meanwhile, India's gold imports declined during the September quarter.

It attributed the fall partly to increased unofficial inflows following the government's decision to raise gold import duties earlier this year.

The WGC's outlook suggests that seasonal demand may offer limited relief, with high prices and reduced rural spending power remaining major challenges for India's gold market.