India’s gold market shifts toward investment demand as jewellery sales fall

India’s gold market is pivoting towards investment as record-high prices cause a 26% drop in H1 FY26 jewellery demand, according to a new report, While consumer buying of jewelry has slowed, demand for gold bars, coins, and ETFs has surged by 74%, making up for the dip in consumption, with investment now accounting for a record ~40% of total demand. High prices and volatility led to a ~26% year-on-year drop in Indian jewellery demand during the first half of FY26.Investment in physical gold (bars/coins) and ETFs jumped by 74% in FY2025 and continued to grow in H1 FY26, driven by investors seeking safe-haven assets amid economic uncertainty, say reports from ICRA & Assocham. Inflows into gold ETFs in India jumped 283% in 2025, reaching a record ₹42,960 crore ($4.67 billion) due to underperformance in the stock market, according to 

the World Gold Council.

 The share of investment demand reached a record ~40% of total Indian consumption in 2025, up from the typical ~25%.Long-term Outlook: Analysts anticipate that sustained high prices will keep jewellery demand subdued in the near term, while investment demand is expected to provide support to the market in the medium term.