WGC: India Gold Demand Turns Cautious as Prices Pull Back Ahead of Festive Season
Gold | 2026-09-21 04:28:09
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.
By Paul Ploumis
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.
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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.
POLL
What is likely to have the biggest influence on India's gold demand during the upcoming festive and wedding season?
Frequently Asked Questions
- How did gold prices perform in India during August and September 2026?
Gold prices recorded a sharp increase in August before correcting in September. The LBMA Gold Price PM rose 13% in August to $4,386/oz, while domestic prices increased 12% to INR 158,854 per 10 grams. By September, international and domestic prices had declined 3.9% and 4.6%, respectively.
- Why have discounts in India's domestic gold market widened?
Domestic discounts increased as gold prices corrected and supplies rose. The average discount widened from $34/oz in July to $51/oz in August and $78/oz by September 11, with increased recycled gold and unofficial supplies contributing to the trend.
- How are high gold prices affecting jewellery demand?
High prices and recent volatility have moderated jewellery purchases. Wedding-related buying has remained comparatively steady, but retailers are reportedly limiting inventory accumulation as they manage the impact of elevated prices on consumer demand.