Gold has long been the heartbeat of Indian festivals, weddings, and weddings gifts. But in 2025, that sparkle is dimming-record bullion prices are putting a strain on traditional gold purchases. According to reports, India’s festive gold demand is set to fall by up to 27% compared to last year. .
For anyone planning to buy gold, sell jewelry, or run a jewelry business, understanding this shift is crucial. Trakintax is here with a simplified breakdown, actionable tips, and insights that will help both consumers and industry players navigate this high-price gold season.
What’s Behind the Drop in Gold Demand?
1. Bullion Prices Are Hitting All-Time Highs
- 1. Gold prices have climbed nearly 50% year-on-year, making purchases more expensive than ever.
- 2. For many buyers, their budget hasn’t grown at the same rate as gold.
- 3. Retailers report that consumers are switching to lighter or smaller pieces rather than skipping purchases altogether.
2. Fixed Budgets vs Rising Costs
- 1. Indian consumers often have a fixed budget for gold during festivals. When prices rise sharply, the same budget yields less gold.
- 2. Many buyers are postponing or deferring purchases in hope of price corrections later in the season.
3. Shift from Ornament Buying to Investment & Exchange
- 1. Instead of buying new heavy jewelry, people are now:
- 2. Buying lightweight & affordable designs
- 3. Exchanging old gold for new pieces
- 4. Investing in coins, bars, or ETFs rather than jewelry
4. Value Over Volume
- 1. Even with lower sales volume, the value (monetary total) may not drop proportionally because each piece is more expensive.
- 2. For a jeweler, revenue may remain stable or even grow slightly despite fewer units sold.
Festive Gold Demand Forecast: By the Numbers
Here’s a snapshot of projections and trends:
| Metric |
Projection / Trend |
| Volume Decline |
Up to 27% drop vs last year |
| Peak Festive Buying Period |
Navratri → Diwali (Sep–Oct) |
| Value vs Volume |
Value may remain buoyant even if volume drops |
| Jewelry Share of Gold Usage |
~70% of India’s gold consumption . |
| Price Increase YTD |
~50% higher than the same festival last year |
What This Trend Means for Different Stakeholders
For Buyers / Consumers
- 1. Act smart, not fast: Wait for promotions, discounts, or small dips rather than panic-buying.
- 2. Go lighter: Opt for smaller pieces in fewer grams; you still carry tradition without overspending.
- 3. Exchange old gold: Many shops offer better rates for trade-ins when new gold prices are steep.
- 4. Check purity & fees: With high gold prices, making charges, hallmarking, etc., matter even more.
For Jewelers & Retailers
- 1. Adjust your offerings: Focus more on lower carat, lightweight, and affordable designs.
- 2. Promote trade-ins: Encourage customers to exchange old gold rather than buying brand new.
- 3. Transparent pricing: Show how much the bullion price is contributing to the total cost.
- 4. Lean on marketing & experience: In a tough market, customer trust, design, and experience make a difference.
For Investors
- 1. With jewelry demand softening, more people may pivot to gold ETFs and digital gold.
- 2. Higher gold prices and lower imports help control trade deficits and support the rupee. .
- 3. Consider small allocations in gold, but balance with equities and safer assets.
Final Thoughts
Festivals and gold have always been intertwined in India, but 2025 is proving different. Prices have pushed some buyers toward caution, lighter pieces, or postponement. For jewelers, the smart pivot is to lean into flexibility, transparency, and consumer empathy.
