Indians’ long-standing affinity for gold was put to a severe test in the first half of this year. A mix of sharp price swings due to the conflict in West Asia and higher import duties kept many away. Now, with Adhik Maas ending on June 15 and prices cooling, the crowds have returned to the fancy air-conditioned showrooms. But analysts warn that this spark is less of a full recovery and more of a temporary reprieve.
“The Adhik Maas period typically brings a temporary moderation in jewellery purchases, as many customers defer auspicious buying until the period concludes,” Dr Joy Alukkas, Chairman and MD of the Joyalukkas Group, told ET Online in an email response.
Alukkas noted that while the company witnessed a short-term dip in line with this seasonal behaviour, the slowdown was further amplified this year by historically elevated gold prices and recent import duty hikes. “Across the industry, demand saw sharp drops, and even our showrooms experienced a slight shortage of footfall during that phase.”
The impact wasn’t limited to large chains. At Delhi-based Swastik Jewels, walk-ins fell by around 30%, with founder Nitin Gupta saying, “Shaadi enquiries were on hold.”
Demand rebounds
Some relief may finally be in sight as the ‘inauspicious’ spell has lifted and prices have pulled back roughly 20% from record highs since the conflict in West Asia erupted in late February.The summer wedding season, which began on June 16 and runs until August 15, is also likely to support demand. It is expected that many will book gold for the upcoming festive season as prices are at a lower level now, said Surendra Mehta, National Secretary of India Bullion & Jewellers Association (IBJA).
Prominent retailers are already seeing that optimism play out on the ground.
“We are seeing a very encouraging and healthy resurgence in sales. Footfalls have picked up strongly, driven by significant pent-up demand from families who had deferred their festive and wedding shopping. Our retail spaces across India are back to business as the market rapidly normalises,” Alukkas said.
Suvankar Sen, Managing Director (MD) and CEO of Senco Gold & Diamonds, told ET Online in an interview that the festive season is set to begin, which is expected to provide a significant boost to the industry. “As an industry and as a company, we are all gearing up,” he said.
The company saw a 25% decline in footfall during Adhik Maas. However, during Q1 FY27, the company’s total revenue grew 60% year-on-year, supported by strong consumer demand across key categories.
At Swastik Jewels, the footfall has already recovered to around 75-80% of normal levels, while advance bookings for Dhanteras have also begun.
Yet the recovery looks different this time.
According to Parag Shah, CEO, KISNA Diamond and Gold Jewellery, Indians are becoming more “deliberate” in their choices. He told ET Online that most transactions are currently concentrated in the ₹60,000 to ₹80,000 range and customers have a clear preference for jewellery that combines “design, versatility and enduring value.”
Meanwhile, the trend of exchanging old gold jewellery for new purchases has strengthened further following the import duty hike in mid-May. Retailers have reported a 10-20% rise in old gold exchange volumes, with some saying that such transactions now contribute as much as 70% of jewellery sales.
The trend suggests consumers are increasingly leveraging accumulated household gold to fund new purchases rather than making entirely fresh investments, as per an ET Bureau report.
Demand was broad, with plain gold and studded jewellery registering double-digit sales growth. Retailers also reported growth both in customer additions and average ticket sizes.
Is the worst over?
While retailers are buzzing with optimism, market analysts are urging caution before declaring a full recovery.
Asked whether gold jewellery demand in India has fully normalised, IBJA’s Mehta said that a true recovery depends on the geopolitical climate.
“Prices have corrected for now, but I don’t expect demand to return to normal immediately,” Mehta said. “For that to happen, two things must occur: the war needs to end, and gold prices must resume an upward trend. People buy when they believe prices will rise and yield strong returns, that holds true for both investments and jewellery.”
But buyer psychology, however, is only part of the story. While gold prices have witnessed a correction lately with West Asia tensions abating, they remain significantly higher than last year’s average prices, keeping affordability under pressure.
The yellow metal is currently priced at around ₹1,41,348-₹1,45,860 per 10 grams for 24-karat gold, up sharply from ₹1,05,000-₹1,07,000 during the same period last year.
“Due to the duty increase and continuing high gold prices, the sector is expected to see its sales volume hit the lowest level in a decade, excluding the Covid-impacted fiscal 2021,” according to Himank Sharma, Director, Crisil Ratings.
Sharma said that the organised gold jewellery retail sector—comprising jewellery, coins and bars—is expected to see sales volumes decline another 13–15% year-on-year this fiscal after contracting 8% last fiscal.
The volumes will fall to 620-640 tonnes this fiscal, “a level not seen in the past decade”, he warned. In fiscal 2026, India imported around 720 tonnes of gold leading to foreign currency outflow of nearly $72 billion.
“While the impact of the gold duty increase will continue over the fiscal, we expect festive and marriage sales to revive the demand to a certain extent in H2 of this fiscal, as has been the trend for the sector.”
Despite the recent headwinds, Alukkas remains confident. He said that while high import duties, elevated gold prices and seasonal factors made the past few months difficult for the industry, “the worst is undeniably behind us,” and the long-term outlook for India’s gold jewellery industry remains extremely positive.
“Gold is deeply woven into the cultural fabric of India, holding a unique place as both an emotional purchase and a trusted investment. As a result, consumer demand has remained resilient and can be delayed, but never denied.”
