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Indian gold demand and shifting consumer trends

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2026-09-27 04:42 UTC → 2026-10-03 02:02 UTC · added ~~removed~~

Indian gold demand and ~~loan sector expansion~~ shifting consumer trends

The Indian gold market continues to experience robust demand despite government efforts to manage the national trade deficit. Although the government increased customs duties on gold from 6 to 15 percent in May to mitigate economic ~~pressure—following a merchandise trade deficit that rose to over $330 billion for~~ pressure, the ~~financial year ending March 2026—the~~ impact has been limited. Gold imports doubled in July, rising to an estimated 40-45 tonnes from 20 tonnes in June, while companies like Titan reported a 63 percent profit increase in the second quarter driven by jewelry sales. This sustained demand and rising valuations have further accelerated the gold loan sector. In Kerala, bank-issued gold loans reached a record ₹1,47,948.91 crore as of June 30, 2026, representing a 44.1 percent increase over two years. Notably, agri-gold loans exceeded the ₹1-lakh crore threshold for the first time, reaching ₹1,06,726.41 crore, while non-agricultural segment loans rose nearly 63 percent to ₹41,222.55 crore. However, recent data suggests potential volatility in import trends. Kotak Institutional Equities has identified downside risks to its USD 88 billion forecast for India’s gold imports in fiscal year 2027, noting a slowdown in official monthly imports since May. While imports for the first five months of FY27 reached USD 17.5 billion, slightly up from USD 16.9 billion in the previous year, the firm warns that the 15 percent duty may have raised domestic prices relative to global rates. Kotak cautioned that the decline might reflect a diversion of trade to unofficial channels, which could result in lost tax revenue, and suggested that taxation reforms could encourage gold recycling. As of late September 2026, precious metal markets are experiencing significant fluctuations. In major Indian cities such as Delhi and Mumbai, 24-karat gold has seen recent corrections and volatility, trading around ₹1,51,000 to ₹1,53,000 per 10 grams. Silver has also faced downward pressure in some regions. While Kotak Institutional Equities has flagged downside risks to India’s gold import forecasts due to the duty hike, analysts suggest that festive season demand may drive a recovery. Shifts in consumer behavior are emerging in response to high prices. In India, retailers are observing increased demand for lightweight jewelry and lower-carat products as consumers manage budgets ahead of festive and wedding seasons. Additionally, consumers are increasingly utilizing gold exchanges to manage upfront costs. Similar trends are noted in the UAE, where specialists report a growing preference for ‘wearable bullion’—24-karat gold necklaces and bracelets that serve as adornment, savings, and investment simultaneously.

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