India's Q2 Gold demand falls 6%, spending hits record: WGC

India's gold demand declined 6 per cent year-on-year to 131.4 tonnes in the April-June quarter of 2026, as higher Customs duty, seasonally subdued purchases and Prime Minister Narendra Modi's appeal to curb non-essential gold buying weighed on consumption, according to the World Gold Council (WGC).India's total gold demand stood at 131.4 tonnes during the quarter, compared with 139.7 tonnes in the corresponding period last year, the WGC said in its 'Q2 2026 Gold Demand Trends' report.
Despite the fall in volumes, the value of gold consumption surged to a record Rs 1,98,100 crore, up 50 per cent from Rs 1,32,500 crore in the April-June quarter of 2025, reflecting elevated gold prices and continued consumer preference for the precious metal.
WGC Regional CEO, India, Sachin Jain said consumers continued to prioritise gold despite higher prices."However, it's been a record in terms of the value of demand. So, consumption was Rs 1,98,100 crores, compared with Rs 1,32,500 crores in the same period in 2025, which is up by 50 per cent compared to the second quarter of 2025, highlighting that consumers continue to prioritise gold even in a high-price environment," he said.
According to agency reports,jewellery demand declined 15 per cent year-on-year to 75.1 tonnes from 88.8 tonnes a year ago. Jain attributed the decline to the seasonal slowdown, the increase in Customs duty and the Prime Minister's call to reduce gold purchases.In May, Prime Minister Narendra Modi had urged citizens to cut back on non-essential gold purchases and explore alternative savings avenues to help reduce the country's import bill amid volatile crude oil prices.
However, investment demand remained resilient. Demand for gold bars and coins rose 9 per cent year-on-year to 50.3 tonnes, while Indian Gold Exchange Traded Funds (ETFs) recorded net inflows of 4.2 tonnes despite global ETF outflows.Jain said these trends underscore gold's increasing appeal as both a traditional store of value and a strategic investment in an uncertain economic environment. He added that the upcoming festive and wedding season is expected to support demand, although elevated prices could continue to influence consumer buying patterns.
The WGC projected India's gold demand for 2026 to remain in the range of 650-750 tonnes, with Jain indicating that demand is likely to settle around the midpoint of the forecast. He noted that a correction in gold prices and a reduction in Customs duty could push demand towards the upper end of the range.Jain also expressed concern over rising illicit trade following the duty hike, saying reports suggest smuggled gold is increasingly entering the domestic market.
On the supply side, gold recycling in India fell 17 per cent to 19.2 tonnes during the quarter from 23.1 tonnes a year earlier, while gold imports declined 23 per cent to 98.1 tonnes from 127.4 tonnes.Globally, the average gold price during the April-June quarter climbed to USD 4,506.3 per ounce, compared with USD 3,280.4 per ounce in the corresponding period last year. In India, the average quarterly gold price (excluding import duty and GST) rose to Rs 1,50,744.8 per 10 grams, up from Rs 94,875.9 a year earlier.