Gold Jewellery Demand Cools As Price Swings Keep Buyers Waiting Ahead Of Festive Season, Says WGC

Demand for gold jewellery in India has softened in recent weeks after a sharp rise in prices in August. The shift comes just as the festive and wedding season gets underway, a period when jewellery shopping typically gains momentum.

However, the demand for gold jewellery could improve across India in the upcoming festive and wedding season, though high prices and volatility could keep some buyers on the sidelines, particularly those making discretionary purchases, the World Gold Council (WGC) has said a post titled India Gold Market Update: Cautious Festive Optimism.

Gold Price Swings Keep Buyers Waiting

The London Bullion Market Association (LBMA) Gold Price PM rose 13 per cent in August to $4,386 an ounce, marking one of its strongest monthly gains in nearly three decades. Domestic gold prices also climbed 12 per cent during the month to Rs 1,58,854 per 10 grams. 

The sharp rise was followed by a lag in September. As on September 11, 2026, international gold prices were down 3.90 per cent for the month, while domestic prices had fallen 4.6 per cent.

WGC said that while wedding-related purchases have been more resilient, there was still a shift towards lighter-weight jewellery, as buyers are looking towards managing the overall cost of purchases.

Festive And Wedding Buying Could Pick Up

The coming weeks could bring stronger jewellery demand as festivals and weddings gather pace, the post said. Consumers buying jewellery for weddings or traditional occasions may be less willing to delay purchases, even when prices move sharply, it said.

The WGC also reported stronger interest in financial forms of gold. Inflows in gold exchange-traded funds (ETFs) in India rose 67 per cent month-on-month (m-o-m) to Rs 2,597 crore in August. Holdings increased by 1.60 tonnes to 121.30 tonnes, while assets under management (AUM) reached Rs 1,91,200 crore.

Digital gold purchases averaged around Rs 2,500 crore a month between June and August. August purchases were 110 per cent higher than a year earlier, indicating that some investors are choosing financial or digital routes instead of physical gold.

Hallmarking Fee Hike Adds To The Cost

The Bureau of Indian Standards (BIS) has also revised hallmarking charges for gold jewellery from September 1, adding to the costs involved in selling hallmarked jewellery.

The fee is only one component of the final jewellery bill, with the gold value, making charges and taxes accounting for much larger portions of the price. However, the revision comes at a time when consumers are already adjusting their buying decisions because of high and volatile gold prices.