Record gold prices: Indian bought less gold jewellery in 2025, spending hits record, says report

Gold prices: India’s gold jewellery market faced a sharp volume contraction in 2025 as soaring prices weighed heavily on consumer affordability, even as spending in value terms surged to record highs, according to the World Gold Council (WGC). The industry body said jewellery demand by volume fell 24% year-on-year to 430.5 tonnes, underscoring how successive record gold prices discouraged buyers from purchasing larger quantities.

Despite the decline in physical consumption, the value of India’s gold jewellery demand climbed to an all-time high of $49 billion, highlighting the dominant role of price appreciation in shaping market outcomes. The WGC noted that a fall in jewellery volumes was “entirely expected in the environment of successive record gold price highs”, reflecting the strong inverse relationship between prices and demand. Globally, jewellery demand by value reached a record $172 billion, even as volumes remained under pressure.

Gold prices in India

Gold prices in India rose about 74% over the year, forcing households to adjust their buying behaviour. Consumers largely maintained their appetite for gold jewellery but reduced the fine weight of purchases to stay within fixed budgets. “Sentiment towards gold jewellery remains very strong in India, but consumers typically have fixed budgets for such spending, and this acts as a brake on the quantity of gold they can buy,” the Council said.

Seasonal and festive buying

Seasonal buying during festivals and weddings provided some relief toward the end of the year. Jewellery demand improved sequentially in the December quarter, but this was not enough to offset the steep annual decline. The WGC observed that festival- and wedding-led purchases lifted quarter-on-quarter demand, but a sharp year-on-year fall was inevitable given record prices. Even so, Indians spent a record $19 billion on gold jewellery in the final quarter, reinforcing the trend of high-value, low-volume consumption.

As jewellery became less affordable, a gradual shift in consumer preference from adornment to investment became more pronounced. The report said this transition is likely to continue, supporting demand for bars and coins. India recorded two consecutive quarters of bar and coin demand exceeding 90 tonnes for the first time since 2013. For the full year, bar and coin demand jumped 17% to 280.4 tonnes, translating into a record value of $32 billion.

Worldwide jewellery consumption

The WGC highlighted that India’s experience mirrored a global pattern. Worldwide jewellery consumption volumes slipped to a five-year low of 1,542 tonnes in 2025 as rising prices constrained affordability. “The remarkable gold price rise in 2025 inevitably imposed affordability constraints on jewellery consumers the world over,” the Council said, even as consumers allocated a larger share of their spending to gold.

High and volatile prices also reshaped buying habits within India. Consumers increasingly opted for lower-weight products, while trade-ins gained popularity as buyers exchanged old jewellery to manage costs. The report noted that 14-carat jewellery saw some acceptance, particularly among younger buyers in northern urban markets. However, most consumers remained hesitant to shift away from higher purity gold, viewing lower carat jewellery as diluting gold’s role as a long-term store of value.

Retailers responded to weaker volume growth by intensifying promotions, allowing organised players to outperform and protect revenues despite falling tonnage. Looking ahead, the WGC cautioned that jewellery demand by volume could remain subdued in 2026 if prices stay elevated. While spending in value terms may remain resilient, sustained record prices are expected to continue limiting physical demand, even as India’s economic outlook offers relatively better support than other major markets such as China.