₹1.50 lakh gold tests Indian consumers: Lightweight jewellery gains traction

Gold’s recent correction could offer some relief to Indian consumers ahead of the festive and wedding season, but elevated prices are continuing to reshape buying behaviour. Mangesh Chauhan, MD, Sky Gold & Diamonds, said buyers are becoming more price-conscious, with lightweight designs, lower-carat jewellery and gold exchanges gaining traction.

Gold and silver have seen a sharp correction after a strong rally, driven partly by profit-booking and changes in US interest-rate expectations. However, Chauhan said the broader demand environment for gold remains healthy, supported by central-bank buying and continued global uncertainty.

For Indian buyers, domestic prices are also influenced by the rupee and import duties, keeping gold expensive even after the recent correction.

“The recent fall is largely a correction after the sharp rally we saw earlier,” Chauhan said.

With gold around ₹1.50 lakh per 10 grams, the key question for the upcoming festive and wedding season is whether the correction will encourage consumers who had postponed purchases to return to the market.

Chauhan expects festive and wedding demand to remain steady, although affordability is likely to remain a key consideration.

“The recent correction may encourage some consumers who were waiting to make their purchases,” he said, adding that affordability and price stability would be important for demand during the season.

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Buyers adapt to high prices

The high price of gold is not necessarily stopping consumers from buying, but it is changing what they buy. Chauhan said retailers are seeing greater demand for lightweight jewellery, lower-carat products and gold exchanges as consumers try to keep purchases within their budgets.

“While volumes may remain broadly steady, higher gold prices can support the overall value of sales,” he said.
Gold exchanges can also help consumers manage the upfront cost of new jewellery, while lightweight designs allow buyers to retain the traditional significance of gold without spending as much on the metal.

Retailers have started replenishing inventories ahead of the festive season, according to Chauhan. A period of relatively stable prices could further improve consumer confidence during Diwali and the wedding season.

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US rates, dollar and rupee remain key

The outlook for gold prices will also depend on global financial conditions. Chauhan said US interest rates and the dollar remain closely linked to gold prices, with changes in expectations around the Federal Reserve’s next rate decision capable of triggering short-term price movements.

For Indian consumers, the rupee adds another layer to the equation because currency movements can influence domestic gold prices. “Gold prices are closely linked to US interest rates and the dollar,” Chauhan said.

Staggered buying for investors

For consumers purchasing gold as a long-term investment rather than for jewellery, Chauhan suggested that buying in stages could be more practical than attempting to identify the exact market bottom.

Investors, he said, should track US interest rates, the dollar, the rupee and global developments.

For the festive season, the combination of a recent price correction and traditional Diwali and wedding demand could support purchases, but consumer behaviour is likely to remain closely tied to affordability and price stability.

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