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Consumers are exchanging their old jewellery for new ones or using it as collateral, says WGC India research head
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SIDDHANT THAKUR
Jewellery demand in India has remained slack after the April-May wedding season got over, and, as a result, the discount on domestic gold to global benchmark prices has widened in June compared with mid-March, the World Gold Council (WGC) has said.
The discount, after adjusting for exchange rate and taxes, has widened primarily due to subdued jewellery demand. “The average discount has widened significantly – from $12/ounce (₹370 per 10 gm) in mid-March to over $38/ounce (₹1,164) by June 13,” said Kavita Chacko, Research Head, India of WGC.
Gold, which has gained nearly 30 per cent this year in addition to increasing by 30 per cent last year, was last quoted at $3,359.95 an ounce. Gold futures, which expire in August, ended at $3,376.47 an ounce. On Multi Commodity Exchange (MCX), August gold futures were last traded at ₹98,907 per 10 gm. Jewellery gold in the Mumbai spot market was quoted at ₹97,070 per 10 gm on Thursday morning.
Store footfalls rise, but…
“Jewellery demand has been underwhelming following the April-May wedding season. According to market reports, softer prices in May boosted store footfalls, particularly for larger retailers offering promotional campaigns. Despite this, demand remained subdued and was largely centred around need-based purchases,” she said.
On the other hand, investment demand for gold in the form of bars and coins was sustained, supported by positive price momentum. Gold bars and coins make up nearly 30 per cent of consumer demand in India.
“There has been a steady and gradual uptick in demand for these products, underpinned by expectations of further increase in gold prices and relatively lower fabrication costs. Notably, demand has been concentrated in lower-grammage coins, particularly those weighing less than 10 g,” said Chacko.
Old for new
The WGC India research head said, going by reports, consumers are exchanging their old jewellery for new ones or using it as collateral.
Chacko said the Reserve Bank of India’s recent relaxation of norms for loans against gold jewellery is expected to further support this trend. “As of end-April, lending by commercial banks in this segment had surged nearly 120 per cent year-on-year to ₹2,23 lakh crore ($26 billion).
Chacko said Indian gold ETFs (exchange-traded funds) regained momentum in May, recording net inflows of ₹290 crore ($34 million) after two consecutive months of outflows.
The inflows, though modest compared to the 10-month average of ₹1,530 crore ($181 million) up to February, exceeded WGC’s initial estimate — based on early data, and reflected renewed investor interest, she said.
Imports decline
This was likely supported by sustained haven demand amid ongoing geopolitical turmoil and market volatility. Preliminary data indicate that the trend of net inflows persisted through the first half of June, the WGC said.
Quoting the Association of Mutual Funds in India (AMFI) data, she said the cumulative assets under management (AUM) of the 20 gold ETFs rose to ₹6.24 lakh crore ($7.3 billion). This was 97 per cent higher than last year. Total gold holdings were 64.65 tonnes, with 0.2 tonnes being added in May.
Investor participation continued to increase, with 2.2 lakh new accounts (or folios) added during the month, bringing the total number to 73 lakh, a 38 per cent growth from last year. It is a sign of continued and broadening investor interest in gold as a financial asset, said Chacko.
However, gold imports in May dropped 13 per cent year-on-year to $2.5 billion. It was for the second month in a row that shipments of the precious metal into the country dropped. The WGC estimates the yellow metal’s imports in May between 27 tonnes and 32 tonnes against 35 tonnes in April. In May 2024, imports were 41 tonnes.
Published on June 19, 2025
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