Gold rally to dent India's jewellery purchases, boost investment: WGC

Share of investment demand in India's total gold consumption will likely rise in 2025, as the price rally curtails jewellery demand but lures investors trying to diversify their portfolios amid geopolitical tensions, the World Gold Council (WGC) said. 

The correction in the stock market amid concerns over a global trade war has been driving investment demand, especially through gold exchange-traded funds (ETFs), while jewellery demand is taking a hit, Sachin Jain, CEO of WGC's Indian operations, told Reuters on Wednesday. 

The country's jewellery demand in the January-March quarter fell 25 per cent from a year ago to 71.4 metric tonnes, the lowest for that period since 2009. In contrast, investment demand experienced a 7 per cent rise to 46.7 tonnes, the WGC said in a report published on Wednesday. 

Share of investment demand in total gold demand surged to 39.5 per cent in the first quarter of 2025, the highest in more than a decade, the WGC data showed. 

Many potential jewellery buyers are on the sidelines due to volatile prices, and they are likely to enter the market once prices stabilise, Jain said. 

Domestic gold prices hit a record high of ₹99,358 per 10 grams earlier this month. They have risen 25 per cent so far in 2025 after rising more than 21 per cent in 2024. 

Despite the price rally, the WGC maintained its gold demand forecast for India at between 700 tonnes and 800 tonnes for 2025, down from last year's 802.8 tonnes, which was the highest since 2015. 

In the March quarter, scrap supplies fell 32 per cent from a year ago to 26 tonnes, the data showed. 

The Reserve Bank of India's gold reserves increased by 3 tonnes in the March quarter, though its buying activity in recent months has been less consistent than in 2024, the WGC said. 

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