According to the India Bullion & Jewellers Association (IBJA), gold demand in the first leg of this year’s festive season—from Raksha Bandhan to Onam—plummeted by approximately 28%, totaling just 50 tonnes, compared to the same period last year.
This significant contraction reflects a broader trend of cautious consumer behavior amid soaring gold prices.
Why Demand Is Falling
- Affordability Crisis: With gold prices nearing or exceeding ₹80,000 per 10 grams, many traditional buyers—including middle-class households—are scaling back purchases.
- Shift in Preferences: While gold jewellery demand tanked by 20–25%, demand for diamond jewellery surged—Gitanjali Gems plans to boost its focus on diamonds in response.
- Cultural Still Matters: Despite volume drops, festive sentiment persists. Consumers are opting to exchange old jewellery or purchase smaller, lighter pieces instead of skipping the tradition entirely.
Implications for the Market
| Impact Area | Insight |
|---|---|
| Jewellery Retailers | Brace for reduced sales volumes, especially in traditional 22K gold, while premium items like diamonds gain traction. |
| Consumer Behavior | Shoppers are prioritizing value—smaller purchases, exchanges, or alternative metals like silver are preferred. |
| Industry Strategy | Retailers may need to offer creative promotions, lighter-weight collections, or flexible schemes to maintain engagement. |
Summary
Gold demand during the primary festive period has dropped significantly—by over a quarter—raising concerns for an industry that usually depends heavily on seasonal buying. High prices are reshaping consumer habits, with a growing preference for diamond jewellery and lighter gold options. Adaptability and innovation in festive offerings will be key for jewellers navigating this challenging environment.
