World · Malaysia Bureau
India's gold demand forecast to hit six-year low in 2026
Rising precious metal prices and increased living costs are expected to dampen India's jewellery consumption next year, with weak monsoon rains further pressuring rural demand in the world's second-largest gold market after China.
LSN Malaysia ·
India's gold demand is projected to contract to its lowest level in six years during 2026, as consumers face mounting economic headwinds that will likely reduce purchases of the precious metal.
The decline reflects a confluence of factors weighing on the Indian market. Elevated gold prices globally have made jewellery purchases less affordable for many households, while inflationary pressures following geopolitical tensions in the Middle East have strained household budgets across the country.
Rural areas, which account for a significant portion of India's gold consumption, face particular pressure. Forecasters warn that a weak monsoon season could further depress agricultural incomes and dampen demand for gold jewellery among farming communities who traditionally increase purchases during festive seasons.
India remains the world's second-largest gold consumer after China, making shifts in domestic demand a critical factor in global precious metals markets. The anticipated slowdown underscores how macroeconomic challenges and weather patterns can significantly influence consumption patterns in major emerging markets.
Analysts expect the pressures on Indian gold demand to persist through 2026, with affordability and rural purchasing power remaining key concerns for the jewellery industry.