India’s Gold Jewellery Demand Hits Covid-Era Low, ETF Inflows Jump 197 Percent

Traditionally, India has been the world’s largest consumer of gold jewellery. However, in 2026, demand patterns are shifting as households and investors increasingly turn to financial instruments like ETFs instead of ornaments.

Jewellery Demand Decline

Jewellery demand fell sharply in the first quarter of 2026, reaching levels last seen during the pandemic. Analysts attribute this decline to record-high gold prices, reduced wedding purchases, and cautious consumer spending. Urban buyers, in particular, are holding back on ornaments.

ETF Inflows Surge

In contrast, gold ETFs saw 197% growth in inflows, marking one of the strongest performances in recent years. Investors are using ETFs as a hedge against inflation and currency volatility, preferring liquidity and transparency over physical gold.

Market Implications

This shift signals a financialization of gold demand in India, with investment-led purchases gaining ground. Experts believe India’s evolving gold market could influence global bullion trends, balancing physical consumption with financial instruments.

Key Highlights

•⁠  ⁠Jewellery demand in India falls to Covid-era lows in early 2026

•⁠  ⁠Gold ETF inflows surge 197%, reflecting investor preference for financial instruments

•⁠  ⁠High gold prices and cautious spending reduce retail jewellery purchases

•⁠  ⁠ETFs seen as safer hedge against inflation and volatility

•⁠  ⁠India’s demand shift could reshape global bullion markets

Sources: World Gold Council, Business Standard, Economic Times, Mint