Festive season fuels revival in Indian gold jewellery market

Gold jewellery demand in India appears to be increasing as the festive and wedding season draws near, World Gold Council said in an update. 

Rising demand, coupled with sustained investment interest, could significantly boost overall gold demand, WGC said.

Gold remain range-bound

In August, gold prices have seen a resurgence, with international prices increasing by over 1% in the first half of the month, reaching $3,335 per ounce. This follows a modest gain of 0.3% in July.

The recent price movement has been influenced by several factors: a weaker US dollar, anticipated US Federal Reserve rate cuts, increasing inflation expectations, and continuing developments regarding tariffs.

In July, the price of gold saw an upward trend, driven by factors such as tariff tensions, geopolitical uncertainties, and worries about inflation. Market momentum also played a role in this movement.

Gold has shown strong performance in 2025, with a 28% year-to-date return in US dollar terms, despite overall price movement remaining range-bound amidst short-term fluctuations.

Indian gold prices rose 1.6% in mid-August to INR99,665 per 10 grams (31% up from the start of the year) due to international trends and a weaker rupee. 

Domestic discounts narrowed significantly from $27 per ounce in June to $3.7 per ounce by mid-August, signaling improving demand, according to WGC.

Festive season revival

With the festive and wedding season approaching (from early August to year-end), the gold jewellery market is showing signs of demand revival.

Industry stakeholders report a positive outlook.

Anecdotal reports from the event indicate that manufacturers observed stronger-than-expected buying interest and a notable increase in orders from both large chain stores and independent retailers.

Kavita Chacko, research head, India, WGC, said in the report:

Buyer sentiment was reportedly bolstered by the stability of gold prices. Additionally, manufacturers are concentrating on producing lighter-weight jewelry to attract price-sensitive consumers and boost sales volumes.

ETFs

In July, Indian gold ETFs continued to see positive net inflows for the third consecutive month. 

This trend has largely been driven by global policy uncertainties and geopolitical tensions. 

However, the pace of these inflows decelerated in July, dropping 41% from the previous month to INR12.6bn ($146 million). 

This figure was in line with initial estimates and approximately 34% higher than the 2024 monthly average of INR 9.4 billion. 

The positive momentum appears to be extending into August, with preliminary data from the first two weeks indicating increased inflows into Indian gold ETFs.

Rising imports

“Gold imports saw a significant rebound, following three months of declines,” Chacko said. 

In July, imports reached $4 billion, significantly exceeding the monthly average of $3 billion for the first half of 2025. 

This marks a 14% year-over-year increase and more than double the value observed in June. WGC estimates that the volume of gold imported in July was between 42 and 48 metric tons. 

Chacko said: