Title: Indian Gold Demand Declines as Prices Hit Record High Amid Wedding Season
As the wedding season approaches, Indian consumers are facing a dilemma: should they buy gold now at rising prices, or should they wait in hopes of a price drop? This uncertainty comes as jewelry demand across the country has plummeted significantly due to escalating gold prices, leaving both buyers and sellers grappling with the implications.
Steep Prices Impact Buying Decisions
B. Muthuvenkatram, a jeweller based in Coimbatore, notes that while many customers express a desire to purchase gold for upcoming weddings, they are hesitant to commit. “A lot of customers want to buy gold for the wedding season, but they’re holding off because prices keep going up. They keep calling us, asking when the prices will drop and when’s the right time to buy,” he said.
Gold jewelry plays a central role in Indian marriages, often seen as an essential component of a bride’s ensemble and a customary gift from family and guests. However, with domestic gold prices recently reaching unprecedented levels, potential buyers are is more cautious than ever.
Unprecedented Price Hikes and Their Effects
According to the India Bullion and Jewellers Association’s secretary, Surendra Mehta, “Right now, jewellery demand has taken a big hit — it’s down by 70-80%. Jewellers all over the country are seeing slow sales.” This stark decline in demand coincides with domestic gold prices, which hit an all-time high of 86,360 Indian rupees ($993.81) per 10 grams. Since the beginning of 2025, prices have surged by more than 10% following a 21% increase in 2024.
To entice customers, Indian gold dealers have started offering discounts of around $30-$38 per ounce, which reflects a significant deviation from the usual discounts that typically exceed $100 per ounce. The current market conditions, which include a supply crunch, have restricted these discounts. Coupled with the record-high prices, consumer appetite has waned, resulting in what one analyst termed ‘negligible’ demand, compelling buyers to adjust to these new price realities.
Global Market Trends and Comparisons
India is not alone in experiencing reduced gold demand; China, the world’s largest gold consumer, has also reported declines. Currently, gold is being offered at a discount of $7-$10 per ounce compared to spot prices in China, primarily due to weakened consumer interest amid soaring prices. A China-based trader observed, “Before the Chinese New Year, we saw demand pick up but should be holiday-related. Demand is very weak now since the price is higher.”
Data from the World Gold Council indicates that India’s jewellery consumption reached 563.4 metric tons in 2024, surpassing China’s at 511.4 tons. Together, China and India account for more than half of global consumer gold demand, showcasing the crucial role both countries play in the gold market landscape.
Outlook and Future Trends
As high gold prices continue to stifle physical demand in India and China, other market dynamics are unfolding. Marex analyst Edward Meir noted that despite a dip in jewelry consumption, strong exchange-traded fund (ETF) and central bank buying are providing some balance to the market.
With the Chinese New Year now behind us, independent analyst Ross Norman highlighted a marked decrease in physical gold demand in both China and Hong Kong, stating, “Reflecting the overall weaker physical demand, gold prices have slipped from a $20 premium over Chinese New Year to an $18 discount against the international price.”
With consumers in India and around the world adapting to these unprecedented market conditions, the coming months will reveal whether gold prices will stabilize or continue to trend upward, influencing buying behavior during this critical wedding season period.
Conclusion
As bridal families grapple with the ache of rising gold prices, the marketplace remains in a state of flux. Domestic and global economic factors will play a crucial role in determining future gold prices, which, in turn, will affect consumer demand in one of the world’s largest gold markets. The jewelry industry is left hoping that prices will eventually align more closely with consumer expectations.
($1 = 86.8975 Indian rupees)
By Brijesh Patel, Rajendra Jadhav, and Anjana Anil; Editing by Veronica Brown and Bernadette Baum
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