WGC Report: India’s appetite for gold has reached an extraordinary financial milestone in the first quarter of 2026, characterized by a sharp divergence between consumption volume and market value. According to the WGC report, the total demand for the yellow metal grew to 151 tonnes, a 10% increase over Q1 2025. Driven by global economic uncertainties, the total value of this demand nearly doubled, skyrocketing by 99% to Rs 227,530 crores, signaling gold’s reinforced status as a premier strategic asset.
Investment Demand: The New Growth Engine
While high prices dampened the festive spirit for some, investors flooded the market, seeking a hedge against inflation and volatility.
- Bar and Coin Surge: Demand for physical bars and coins rose by 34% to 62.3 tonnes. In value terms, this segment exploded by 142%, reaching Rs 94,100 crores.
- ETF Explosion: Gold Exchange Traded Funds (ETFs) witnessed a massive 197% increase in volume, hitting 19.9 tonnes. The value of ETF investments surged a staggering 437% to Rs 30,000 crores.
Supply, Imports, and Pricing Dynamics
The quarter saw increased activity across all supply channels as the industry adapted to a high-price environment.
- Recycling Uptick: High prices encouraged profit-taking, leading to a 20% rise in recycled gold, totaling 31.2 tonnes.
- Import Growth: To meet the burgeoning investment appetite, total gold imports rose by 39% to 186 tonnes.
- Record Pricing: The average quarterly price of gold hit 4,873 Dollar/oz (compared to 2,860 Dollar in Q1 2025). Domestically, the average price stood at INR 1,51,105 per 10g (excluding GST and duty).
Sachin Jain, Regional CEO, India, World Gold Council said:
“India’s gold market in Q1 2026 reflects a continued divergence between volume trends and value growth, shaped by record-high prices and evolving consumer preferences. Total gold demand for the quarter stood at 151 tonnes, marking a 10% increase compared to Q1 2025. In value terms, demand nearly doubled to Rs. 227,500 crores, up 99% year-onyear, underscoring the impact of the sharp rise in gold prices.
Jewellery demand faced notable headwinds during the quarter, declining 19% year-on-year to 66 tonnes, as elevated prices and affordability constraints continued to weigh on consumption, particularly in price-sensitive segments. However, the value of jewellery demand remained resilient at Rs. 99,900 crores, reflecting the strong price environment and a gradual shift towards lighter and more value-conscious purchases. In contrast, investment demand emerged as a key driver of overall growth. Investment demand rose 34% year-on-year to 62.3 tonnes, while its value surged 142% to Rs. 94,130 crores. This strong momentum highlights increasing investor confidence in gold as a strategic asset, supported by heightened global uncertainties and its role as an effective hedge against inflation and market volatility.
On the supply side, recycling activity also saw an uptick, rising 20% to 31.2 tonnes, as higher prices encouraged partial profit-taking, although overall sentiment continues to favour holding gold as a long-term store of value. Looking ahead, while elevated prices may act as a near-term headwind for jewellery demand, the summer wedding season and regional festivals are expected to provide support, building on the momentum seen during Akshaya Tritiya. At the same time, investment demand is likely to remain resilient, with gold continuing to be viewed as a safe-haven 75 asset and an important portfolio diversifier amid ongoing global uncertainties. We estimate full year demand to be in the range of 650-750 tonnes.”
Future Outlook
The World Gold Council remains optimistic about the remainder of the year. Sachin Jain noted that while elevated prices may act as a near-term challenge, the upcoming summer wedding season and regional festivals are expected to provide much-needed support to the jewellery sector.
- Safe-Haven Status: Ongoing global uncertainties are expected to keep investment demand resilient as gold remains a critical portfolio diversifier.
- Full-Year Estimate: The World Gold Council projects India’s total gold demand for the full year to fall within the range of 650-750 tonnes.
FAQ’s
1. What was India’s total gold demand in Q1 2026?
India’s total gold demand stood at 151 tonnes in Q1 2026, marking a 10% increase compared to the same period in 2025, reflecting steady growth despite high prices.
2. Why did the value of gold demand rise इतना sharply?
The value surged by 99% primarily due to record-high gold prices globally and domestically, which significantly increased the overall monetary value even with moderate volume growth.
3. Which segment drove the growth in gold demand?
Investment demand was the key driver, with strong growth in gold ETFs, bars, and coins as investors sought safety amid inflation and economic uncertainty.
4. Why did jewellery demand decline in Q1 2026?
Jewellery demand fell by 19% due to high gold prices and affordability constraints, especially in price-sensitive segments, though value remained stable due to elevated prices.
5. What is the outlook for gold demand in India for 2026?
The World Gold Council expects total demand to remain between 650–750 tonnes, supported by investment demand and seasonal factors like weddings and festivals, despite short-term pressure from high prices.
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