Gold jewellery demand dips after wedding season but investment buying stays strong: Report

Mon July 21 2025

Jewellery demand succumbed to seasonal weakness in June and early July, following the conclusion of the wedding season, but investment demand for the yellow metal remained strong, according to a report by the World Gold Council (WGC).

Persistently high gold prices further suppressed demand, prompting consumers to defer non-essential purchases and opt for more affordable alternatives such as lightweight, lower-carat, or studded jewellery. The trend of exchanging old jewellery to manage costs continued to gain traction, as per market reports.

Meanwhile, the shift toward investment-oriented buying persisted, with a growing preference for gold bars, coins, and plain gold chains (seen as quasi-investments), which are favoured for their lower fabrication charges.

As per anecdotal reports, demand has been concentrated in lower-grammage coins, particularly those weighing less than 10g, the WGC said in the report.

Leading listed gems and jewellery companies delivered a strong performance in the April–June quarter, reporting year-on-year revenue growth between 18% and 31%. This growth was largely price-led, even as volumes remained flat or moderated.

A 32% year-on-year rise in gold prices during the quarter and key festivals and wedding demand during April–May boosted sales revenue.

High gold prices saw consumers shift toward lighter, lower-karat jewellery, while retailers effectively leveraged old gold exchange programs to drive sales. Some companies reported that old gold exchange was involved in as many as 40% of their sales. Studded jewellery continued to gain traction, while digital channels and franchise-led formats saw expansion, highlighting the industry’s evolving retail strategies.

Store expansion continued, with corporate retailers adding between two and 19 new outlets during the quarter, increasing the footprint of organised players in the sector.

Indian gold ETFs saw a significant surge in inflows during June, outpacing peers across Asia and likely driven by elevated geopolitical tensions in the Middle East, which reinforced gold’s traditional resilient and strategic asset attributes.

Net inflows soared to INR 20.8 billion (US$242 million), the highest monthly inflow since January 2025 and the second-largest on record, broadly in line with our initial estimated flows.

This momentum has continued into July, with healthy inflows recorded in the first 10 days of the month. Data from the Association of Mutual Funds in India (AMFI) show that cumulative assets under management (AUM) in Indian gold ETFs rose to INR 648 billion (US$7.5 billion), an 88% year-on-year increase.

Total gold holdings climbed to 66.7 tonnes, with 2 tonnes added in June and 9 tonnes in the first half of 2025.

Source: https://economictimes.indiatimes.com/