Gold Prices Soar, Buyers Hold Back: India’s Jewellery Market Feels the Heat

India’s gold market is witnessing a sharp decline in demand as soaring prices push buyers to reconsider their purchases. According to the latest data, gold demand fell 15% in the March quarter, marking the steepest drop in five years. Jewellery sales took the biggest hit, plunging 25% to 71.4 tonnes, as consumers hesitated to invest in high-priced ornaments.

 

Despite the slowdown in jewellery purchases, investment demand remained strong, with a 7% year-on-year increase in gold ETFs, digital gold, coins, and bars. The price surge, which saw gold surpass ₹1 lakh per 10 grams for the first time, reinforced its appeal as a safe-haven asset.

 

Retailers report that buyers are opting for lighter jewellery pieces or postponing purchases, hoping for a price correction. Wedding-related demand has remained relatively stable, given the cultural significance of gold in Indian ceremonies. Meanwhile, gold imports rose 8% to 167.4 tonnes, signaling optimism among retailers about future demand.

 

With global gold prices crossing $3,000 per troy ounce, the market remains volatile. While consumers wait for more affordable buying opportunities, the industry anticipates overall demand to stay between 700-800 tonnes for the year.

 

Source: The Economic Times