India’s appetite for gold is undergoing a notable shift. In the March quarter, investment demand for the precious metal overtook jewellery consumption for the first time on record, as investors gravitated towards gold amid relatively muted returns in equity markets, according to the World Gold Council.
The surge in investment buying helped balance a decline in jewellery purchases, which were impacted by rising prices. As a result, overall gold demand in the country remained stable despite shifting consumer behaviour.
“For the first time investment demand surpassed jewellery demand,” Sachin Jain, chief executive of the WGC’s India operations, told Reuters. “Investment demand will become increasingly prominent in the coming quarters, with both financial and retail investors showing more interest in gold.”
Data from the WGC shows that investment demand jumped 52% year-on-year to 82 metric tons in the March quarter. In contrast, jewellery demand declined 19.5% to 66 tons during the same period. Despite this divergence, total gold consumption in India rose 10.2% to 151 metric tons. This indicates that stronger investment flows more than compensated for the slowdown in jewellery buying.
Traditionally, investment demand contributes roughly a quarter of India’s overall gold consumption. However, rising gold prices have increasingly pushed investors towards options like gold coins, bars, and exchange-traded funds.
This shift is further reflected in ETF inflows. Investments in gold ETFs surged 186% year-on-year to a record 20 tons in the March quarter, the WGC reported. Analysts attribute this trend to underwhelming stock market performance, which has encouraged investors to seek safer assets.
Since early 2025, domestic gold prices have nearly doubled, while the benchmark Nifty 50 has registered a comparatively modest gain of 2.4%. This widening gap in returns has made gold an increasingly attractive option, a trend that experts believe could continue in the coming months.
