Gold, often seen as the most loved investment and festive purchase in India, has seen a sharp fall in demand this year. Reports show that demand for gold dropped over 25% during this festive season, surprising both jewellers and analysts.
Why the Drop?
- Rising Prices: Gold prices touched record highs, crossing ₹66,000 per 10 grams, making it unaffordable for many middle-class buyers.
- Economic Uncertainty: Slowing income growth and cautious spending habits reduced consumer appetite.
- Shift to Other Investments: More people are choosing mutual funds, stocks, and fixed deposits instead of gold.
- Changing Preferences: Young buyers prefer lightweight jewellery, lab-grown diamonds, or luxury gadgets instead of heavy gold ornaments.
Impact on the Market
Jewellery stores across major cities reported lower footfall during Dhanteras, Diwali, and wedding-related shopping. Rural markets, which traditionally account for a big share of gold sales, also saw weaker demand due to uneven monsoons and pressure on farm incomes.
Industry Experts Speak
Analysts believe that while this is a short-term slump, long-term demand for gold in India will remain strong due to cultural importance. However, unless prices cool down, the slowdown may continue in the upcoming wedding season.
What’s Next?
Experts expect gold demand to recover slightly if prices stabilise and consumer confidence improves. Until then, jewellers may focus more on lightweight designs, instalment-based buying schemes, and digital gold investments to attract customers.
Summary Table
| Factor | Impact on Gold Demand |
|---|---|
| High Prices | Made gold unaffordable for many buyers |
| Weak Rural Income | Reduced festive and wedding purchases |
| Alternative Investments | More interest in stocks, FDs, mutual funds |
| Consumer Preferences | Shift toward lightweight jewellery, diamonds, gadgets |
| Market Impact | 25% drop in demand, lower footfall in stores |
| Future Outlook | More interest in stocks, FDs, and mutual funds |
