India’s Deepavali gold buyers opt for lighter jewellery, exchange old pieces amid high prices
Gold prices have eased from their January peak, but remain high enough to constrain purchases. Jewellers in India are hoping the festive season will provide a boost to demand.
A staff member shows gold bangles at a jewellery store in Ahmedabad on May 12, 2026. (Photo: AFP/Shammi Mehra)
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MUMBAI: For Manisha Shinde, Deepavali would not be complete without buying gold.
She is spending about US$700 on a gold coin ahead of the festival of lights, which falls on Sunday (Nov 8).
“It’s Deepavali, and I’m buying this as a gift for my daughter-in-law. This is so she can use the gold later to make ornaments,” she told CNA.
Gold is traditionally bought during festivals and weddings in India, where it is regarded as a symbol of prosperity and a long-term investment.
Global gold prices have eased from a record high of nearly US$5,600 an ounce in January, offering some relief to buyers. But the precious metal remains expensive, currently trading at around US$4,000 an ounce.
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BUYERS OPT FOR LIGHTER JEWELLERY
Jewellers say high prices are prompting customers to choose lighter pieces or exchange old gold for new jewellery.
“It’s not that people are not buying jewellery, but obviously what they have done is that they have reduced their purchases in terms of grams,” said Aditya Modak, chief operating officer of jewellery retailer PN Gadgil & Sons.
The depreciation of the Indian rupee is also making gold more expensive for domestic buyers.
In May, the government raised import duty on gold from 6 per cent to 15 per cent to curb imports and reduce the outflow of foreign exchange.
According to the World Gold Council – an industry body – physical gold prices in India rose by about 4 to 6 per cent following the increase.
Elevated crude oil prices amid the United States-Iran war are adding further pressure to India’s import bill.
Prime Minister Narendra Modi appealed to Indians in May to put off buying gold for a year to conserve foreign exchange and renewed his call in September as part of a broader push for self-reliance.
He also encouraged Indians to avoid unnecessary foreign travel and overseas weddings, and to spend more on domestic goods and services.
INDIA’S GOLD DEMAND TO HIT SIX-YEAR LOW
The World Gold Council expects India’s overall gold demand to fall to a six-year low in 2026, partly because high prices are weighing on jewellery sales.
Its latest figures show that jewellery demand fell 20 per cent by weight to just under 100 tonnes in the July-to-September quarter compared with the same period last year.
However, higher prices meant Indians spent 16 per cent more on gold jewellery over the same period, with purchases valued at 1.49 trillion rupees (US$16 billion).
Despite the weaker demand, the council sees reasons for optimism as prices ease and the festive season gets underway.
“This perhaps will be the most important Diwali that we witnessed in many years. And we see that because at this level of pricing, the consumer is very buoyant around gold,” said Sachin Jain, the World Gold Council’s regional CEO for India.
“We’ve seen very big highs in the beginning of the year … and a lot of people, a lot of investors who could not get into the rally,” Jain said.
He added that investors see the recent dip as an attractive opportunity to buy.
The council also expects festive and wedding purchases to support demand in the final quarter of the year, although high prices could continue to limit the amount of jewellery bought.
Source: CNA/mp(dn)
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