WGC: India Gold Demand Turns Cautious as Prices Pull Back Ahead of Festive Season

Gold | 2026-09-21 04:28:09 | By Paul Ploumis

Indian gold ETF inflows increased 67% month-on-month in August to INR 25.97 billion, while holdings rose 1.6 tonnes to 121.3 tonnes.

Summary

Gold Prices Correct After Sharp August Rally
The LBMA Gold Price PM jumped 13% in August to $4,386 per ounce, while domestic prices rose 12% to INR 158,854 per 10 grams. Both international and domestic prices subsequently corrected in September.
High Prices Weigh on Jewellery Demand
Elevated prices and increased volatility have moderated jewellery purchases, although wedding-related demand remains relatively steady. Wider domestic discounts, reaching $78/oz by September 11, were also supported by increased recycled and unofficial gold supplies.
Investment Demand Shows Resilience
Indian gold ETF inflows rose 67% month-on-month in August to INR 25.97 billion, while ETF holdings increased to 121.3 tonnes. The World Gold Council expects gold demand to improve modestly as the festive and wedding season progresses, although high prices could continue to constrain jewellery consumption.

SEATTLE (Scrap Monster): The latest market report published by the World Gold Council (WGC) indicates that India’s gold market is entering the key festive and wedding period with cautious optimism.

Gold prices surged sharply in August before correcting in September. The LBMA Gold Price PM climbed 13% in August to $4,386 per ounce, while domestic prices rose 12% to INR 158,854 per 10 grams. By September, international and domestic prices had declined 3.9% and 4.6%, respectively.

Gold Prices Slip as Inflation, Oil and Fed Rate Risks Mount

The recent correction in gold prices has widened discounts. The average domestic discount increased from $34/oz in July to $51/oz in August and $78/oz by September 11. Increased recycled gold supply, coupled with rising unofficial supplies, has also contributed to the wider discount.

Elevated gold prices and recent volatility have reduced jewellery purchases, while investment demand remains comparatively resilient. Jewellery demand has moderated, although wedding-related purchases remain relatively steady. Also, retailers are seen limiting inventory buildup.

Indian gold ETF inflows increased 67% month-on-month in August to INR 25.97 billion, while holdings rose 1.6 tonnes to 121.3 tonnes. Also, digital gold purchases averaged around 1.6 tonnes monthly between June and August.

WGC foresees modest improvement in demand, as the festive and wedding season advances, although high prices may limit jewellery purchases.