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India Gold Demand Strengthens as Jewellery and ETF Buying Rise
India's gold market is showing stronger seasonal demand as jewellery retailers replenish inventories and investment flows remain firm. September's price correction has encouraged buying ahead of the festive and wedding period, although elevated gold prices continue to limit physical volumes.
Key Points
- Gold prices: Domestic prices fell 4.8% in September to INR147,613 per 10 grams.
- Physical market: Domestic discounts narrowed sharply to US$8/oz by October 16 as seasonal demand improved.
- Jewellery: Retailers are rebuilding inventories ahead of the festive and wedding period, with lighter-weight designs and exchange offers supporting demand.
- Gold ETFs: September net inflows reached INR44.5 billion, the highest level in seven months.
- Digital gold: September purchases reached an estimated 1.7 tonnes, while purchase value rose 83% year over year.
SEATTLE (Scrap Monster): India's gold market is showing early signs of stronger seasonal demand, with jewellery buying improving and investment demand remaining resilient ahead of the country's key festive and wedding period, according to the latest World Gold Council market update.
The improvement follows a sharp September correction in gold prices. India's domestic gold price fell 4.8% during the month to INR147,613 per 10 grams, while the international gold price declined 8.5%.
Prices have since traded in a relatively narrow range during October, helping bring some stability back to the physical market.
Domestic Gold Discounts Narrow Sharply
One of the clearest signs of improving seasonal demand has been the narrowing of India's domestic gold discount.
The discount to import parity averaged approximately US$66 per ounce in September before narrowing to around US$8 per ounce by October 16.
The World Gold Council said the change reflects stronger seasonal buying, although the continued discount indicates that domestic supply remains adequate.
Old-gold exchange activity and unofficial inflows have also contributed to available local supply.
ScrapMonster Edge: Lower Prices Are Bringing Buyers Back
September's gold-price decline has given Indian consumers a more attractive entry point just as seasonal jewellery demand begins to strengthen.
Retailers are reporting better store traffic and manufacturers are receiving healthier orders as inventories are rebuilt ahead of the festive and wedding season.
The recovery is showing up in both jewellery and investment products, but elevated gold prices continue to favour lighter designs, exchange programmes and smaller investment formats rather than a broad surge in physical volumes.
Jewellery Orders Improve Ahead of Peak Season
Jewellery manufacturers are reporting healthier order flows as retailers replenish inventory for the seasonal buying period.
Consumers continue to favour lighter-weight jewellery, which allows buyers to manage the impact of historically high gold prices while still participating in traditional festive and wedding purchases.
Jewellers have also increased promotional activity and are using old-gold exchange programmes to encourage consumers to trade existing pieces for new jewellery.
Those exchange programmes are becoming an important source of domestic gold supply as well as a driver of retail transactions.
Listed Jewellery Companies Post Strong Revenue Growth
India's major listed jewellery retailers reported year-over-year revenue growth of approximately 20% to 30% during the July-September quarter.
The performance came despite high and volatile gold prices and an unfavourable comparison in the festive calendar.
According to the World Gold Council, same-store sales growth of around 20% suggests the gains were not driven only by new store openings.
Higher average transaction values, wedding demand, promotional campaigns, e-commerce growth and consumer preference for lighter jewellery all contributed to the stronger revenue performance.
Gold ETF Inflows Hit Seven-Month High
Investment demand remained another source of strength.
Indian gold-backed exchange-traded funds attracted INR44.5 billion, or approximately US$466 million, in net inflows during September, the strongest monthly inflow in seven months.
Nearly 3 tonnes were added to ETF holdings during the month, taking total holdings to approximately 124 tonnes.
ETF demand remained positive into October, with estimated net inflows of INR17.22 billion during the first half of the month.
The World Gold Council said the September price decline appears to have encouraged investors to add gold as a portfolio diversifier and strategic asset.
Fund-of-Funds Restrictions Expected to Have Limited Near-Term Impact
Fresh and additional subscriptions into gold savings funds and gold Fund of Funds were temporarily suspended from October 16.
The restriction does not prevent investors from buying gold ETFs directly.
Existing systematic investment plans into gold Fund of Funds can also continue, as can ETF unit creation and normal activity by market makers and authorised participants.
The World Gold Council therefore expects the immediate impact on overall Indian gold ETF flows to remain relatively contained.
Digital Gold Demand Remains Firm
Digital gold purchases also strengthened during September.
Estimated volumes reached approximately 1.7 tonnes, above the longer-term monthly average since the beginning of 2025.
The value of purchases reached INR25.9 billion, up approximately 4% from August and 83% from a year earlier.
Year-to-date digital gold purchases totaled 16.3 tonnes, compared with 9.2 tonnes during the corresponding period of 2025.
The continued growth reflects the accessibility of digital gold and the ability for consumers to invest in relatively small amounts.
Gold Imports Fall Sharply
India's gold imports moved sharply lower in September despite the approach of the festive season.
Import value fell to approximately US$1.8 billion, the lowest level since March 2024 and down 22% from August and 81% from September 2025.
The World Gold Council estimates gross import volumes at around 20 tonnes.
The decline suggests that domestic inventories, old-gold exchanges and other local supply sources have been sufficient to meet much of the recent demand without requiring heavy fresh imports.
Gold Futures Activity Eases From August High
Trading activity on India's Multi Commodity Exchange remained firm in September but eased from August's five-month high.
Average daily gold futures volume declined approximately 4% month over month to 18.3 tonnes, while average daily turnover fell 10% to INR265 billion.
Even after the monthly decline, both measures remained around 20% above their April-August averages, indicating continued investor interest in gold for hedging and tactical positioning.
Market Read
India's gold market is entering its strongest seasonal period with a healthier demand backdrop than it had a month ago.
The September price correction has encouraged jewellery purchases, narrowed domestic discounts and attracted additional ETF investment. At the same time, digital-gold buying remains strong and major jewellers are reporting healthy revenue growth.
The constraint remains price. Gold is still historically expensive, which is encouraging consumers to favour lighter pieces, old-gold exchanges and investment products that allow smaller purchases.
The coming festive and wedding season should therefore support spending, but higher spending does not necessarily mean equally strong growth in the physical weight of gold purchased.
What to Watch Next
Jewellery volumes: Revenue growth has remained healthy, but the next test is whether lower prices translate into stronger physical volumes during peak wedding demand.
Domestic discounts: A further narrowing toward import parity would indicate stronger physical demand relative to available local supply.
ETF flows: Direct ETF investment remains open despite the temporary Fund-of-Funds subscription restrictions.
Imports: September imports were exceptionally weak. A rebound would indicate that domestic inventories and recycled supply are no longer sufficient to meet seasonal buying.
Source: World Gold Council, India Gold Market Update, October 20, 2026.