Key points
- While imports of gold jewelry dipped to a 14-month low in June and the country experienced a seasonal slump in traditional purchases, retail profits surged and interest in gold exchange-traded funds (ETFs) skyrocketed.
- Top Indian jewelry retailers posted annual revenue gains between 18% and 31% in Q2 of the financial year, primarily driven by a 32% year-on-year spike in gold prices and a brief buying spree in April and May.
- Fueled by global uncertainty, especially tensions in the Middle East, Indian investors added a net 2 tonnes of gold in June alone, bringing H1 2025 additions to a record 9 tonnes.
Gems and Jewellery News: Indian Gold Craze Unshaken by Soaring Prices and Import Declines
Despite record-breaking gold prices, declining imports, and a slowdown in jewelry demand, India’s obsession with gold remains unwavering. In fact, a recent analysis by the World Gold Council reveals that Indian consumers are still pouring money into gold jewelry and investment-grade bullion with almost irrational zeal. While imports of gold jewelry dipped to a 14-month low in June and the country experienced a seasonal slump in traditional purchases, retail profits surged and interest in gold exchange-traded funds (ETFs) skyrocketed.
Rising gold prices have not deterred Indian consumers from buying gold jewelry and ornaments.
Image Credit: Jewelry Express
This Gems and Jewellery News report finds that gold prices rose modestly by 0.3% month-on-month in June. The gains were largely supported early in the month by a weakened US dollar, geopolitical tensions, softer US Treasury yields, and continued inflows into ETFs. However, investor sentiment pivoted toward riskier assets toward the end of the month, limiting gold’s momentum. Still, by July, gold prices were up another 2%, contributing to a stunning 28% year-to-date increase for 2025 in US dollar terms.
Jewelry Purchases Dip but Indians Find New Ways to Buy
Although Indian gold prices surged to ₹95,676 per 10 grams by end-June and climbed further to ₹97,095 in July, jewelry demand experienced a notable pullback. The wedding season ended, and monsoon season traditionally slows spending. But even more significantly, the higher gold prices have prompted many Indians to postpone purchases or opt for alternatives like lightweight, lower-karat jewelry or gemstone-studded pieces.
Kavita Chacko, Head of Research at the World Gold Council, observed that many consumers are exchanging old jewelry to mitigate high costs. Meanwhile, demand for investment-oriented products such as gold bars, coins, and chains—which are simpler and involve lower production costs—has increased substantially.
Jewelry Brands Record Higher Profits Despite Volume Decline
Even as fewer gold items were sold in terms of volume, the value per transaction surged due to the higher gold prices. Top Indian jewelry retailers posted annual revenue gains between 18% and 31% in Q2 of the financial year, primarily driven by a 32% year-on-year spike in gold prices and a brief buying spree in April and May.
Interestingly, the jewelry industry has adapted swiftly. Retailers are expanding their digital presence and brick-and-mortar footprints simultaneously. In the past quarter alone, leading jewelry brands opened anywhere from two to 19 new stores across the country. Gemstone-studded jewelry, seen as more affordable and stylish, is gaining traction among urban consumers looking for a middle ground between aesthetics and investment.
Gold ETFs Hit Record Highs as Investors Seek Safety
Investment demand for gold is booming. Indian gold ETFs recorded their second-highest monthly net inflow in history in June, totaling ₹20.8 billion (USD 242 million). Fueled by global uncertainty, especially tensions in the Middle East, Indian investors added a net 2 tonnes of gold in June alone, bringing H1 2025 additions to a record 9 tonnes.
Total ETF holdings now stand at 66.7 tonnes, with overall assets under management soaring to USD 7.5 billion—an 88% jump from the previous year. Retail investor participation has exploded, with 280,000 new accounts opened in June, a 41% increase year-on-year. This massive shift highlights how gold is solidifying its position not just as a luxury commodity but as a trusted investment option for Indian households.
RBI Cautious But Still Adds to Gold Reserves
On the government side, the Reserve Bank of India (RBI) resumed gold purchases after a three-month pause, adding 0.4 tonnes in June. Although this brings total reserves to an all-time high of 880 tonnes, the pace has slowed considerably. RBI bought just 3.8 tonnes in the first half of 2025, compared to 37.1 tonnes in H1 2024. This measured approach may reflect a strategy to wait for price corrections, but it hasn’t prevented gold’s share in India’s forex reserves from reaching a record 12.1%.
Imports Crash to 14-Month Low but Demand Expected to Rebound
While domestic interest in gold remains intense, gold imports fell sharply in June—down 26% year-on-year and 28% from May—due to high global prices. Only 19 to 24 tonnes were imported in June, compared to 31 tonnes the previous month. Nevertheless, industry insiders remain optimistic.
Chacko predicts a strong rebound in gold jewelry demand by mid-August, as the Indian festive season kicks off with Raksha Bandhan and continues through Diwali. Meanwhile, investment demand is expected to remain robust, supported by inflation fears, geopolitical instability, and outperforming gold prices.
India’s love affair with gold shows no signs of fading. Whether as adornment, investment, or family heirloom, gold remains deeply entrenched in the cultural and financial DNA of Indian society—even when prices soar. The continued expansion of jewelry retailers, the explosive growth of ETFs, and a loyal consumer base all point to a future where gold glitters brighter than ever in the Indian market.
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