India’s appetite for gold took a decisive turn in the March quarter, with investment demand overtaking jewellery consumption for the first time on record, as investors sought refuge in the precious metal amid weak equity returns, the World Gold Council said on Wednesday.
The shift in buying patterns in the world’s second-largest consumer of gold came as a surge in investment demand partly balanced a drop in jewellery purchases, which were hit by sharply rising prices. This helped keep overall demand stable during the quarter, the council said.
“For the first time investment demand surpassed jewellery demand,” said Sachin Jain, chief executive of the council’s Indian operations, in a statement to Reuters.
He added that “Investment demand will become increasingly prominent in the coming quarters, with both financial and retail investors showing more interest in gold.”
Investment demand jumped 52% year-on-year to 82 metric tons in the March quarter, while jewellery demand fell 19.5% to 66 tons, according to the council’s report released on Wednesday.
Despite the fall in jewellery buying, total gold consumption in India rose 10.2% to 151 metric tons during the quarter.
For the first time, investment demand accounted for a larger portion of overall consumption than jewellery, rising to 54.3% of the total during the quarter.
Traditionally, investment demand makes up roughly a quarter of India’s total gold consumption. However, rising prices have driven investors towards coins, bars and gold exchange-traded funds.
This shift highlights a broader change in how Indians are approaching gold, moving from adornment to asset.
Inflows into gold exchange-traded funds surged 186% compared with a year earlier to reach a record 20 tons in the March quarter, the council said.
Jain said weak stock market performance in recent quarters has been pushing investors towards gold ETFs, and this trend is likely to continue.
Domestic gold prices have nearly doubled since the beginning of 2025. In contrast, the benchmark Nifty 50 has risen only 2.4% over the same period.
Gold purchases during Akshaya Tritiya dropped about 30% by volume this year, as higher prices discouraged large purchases, according to jewellers.
Buyers remained within their budgets, choosing lighter jewellery, smaller coins and exchange deals instead of heavier items. Millennials largely opted for solitaires priced between ₹75,000 and ₹2.5 lakh.
Akshaya Tritiya is widely seen as an auspicious time to invest in gold, with purchases linked to the idea of lasting wealth. The period typically accounts for 15% to 20% of annual retail sales, said Aamir Makda, commodity and currency analyst at Choice Broking.
(with Reuters inputs)
