India’s gold market is showing signs of renewed momentum as the country enters its important festive and wedding season. Following a sharp price correction in September 2026, domestic gold prices have stabilised, jewellery demand is improving and investors are continuing to add gold through exchange traded funds and digital platforms.
The latest market update from the World Gold Council points to a resilient Indian gold market, despite elevated prices and ongoing uncertainty in global financial markets. Seasonal buying is beginning to strengthen, while the recent pullback in prices has encouraged some investors to increase their exposure to gold.
For the global gold market, India’s response to the price correction is important. As one of the world’s largest gold-consuming markets, changes in Indian jewellery demand, investment activity and imports can influence physical gold flows and overall market sentiment.
Domestic gold prices stabilise after September’s correction
Gold prices fell sharply in September, with the international gold price ending the month at US$4,176 per ounce, down 8.5% over the month. Indian domestic gold prices declined by a smaller 4.8% to INR147,613 per 10 grams, partly because weakness in the rupee cushioned the impact of lower international prices.
By mid October, international prices had largely stabilised, while domestic prices were around 1% lower than at the end of September.
An important sign of improving physical demand has been the narrowing of domestic market discounts. Indian gold discounts reportedly narrowed from an average of US$66 per ounce in September to around US$8 per ounce by 16 October.
The change suggests that seasonal buying is helping absorb available supply. However, continued discounts relative to import parity indicate that the domestic market is not experiencing a widespread shortage of gold.
Festive and wedding demand begins to improve
India’s festive calendar and wedding season are important drivers of annual gold consumption. Jewellery retailers are reporting healthier order flows as manufacturers replenish stock and shops prepare for increased customer activity.
The recent price correction has also helped some consumers return to the market after a period when elevated prices had made gold purchases more expensive.
Jewellers are responding with new designs, lighter weight jewellery and promotional offers. Old gold exchange programmes are also encouraging customers to trade existing jewellery towards new purchases, supporting sales while returning previously purchased metal to the supply chain.
This distinction matters because higher sales revenue does not necessarily translate into higher gold consumption by weight. When prices are elevated, consumers may spend more money while purchasing fewer grams of gold.
Indian jewellery retailers report strong revenue growth
Listed Indian jewellery retailers recorded revenue growth of approximately 20% to 30% year on year during the July to September quarter, according to the World Gold Council’s update.
Growth was supported by existing-store sales, network expansion, wedding-related purchases, promotional campaigns and online sales. Major retailers also continued opening new stores.
However, the increase in revenue partly reflects higher gold prices and consumers trading up to premium products. Customer numbers grew at a more moderate pace, while average transaction values increased by double digits.
Old gold exchange activity remained particularly important, rising by more than 10% year on year. For some retailers, these transactions accounted for more than half of sales.
The figures suggest that Indian consumers continue to value gold jewellery, although higher prices are influencing how they buy it.
Gold ETF inflows reach a seven-month high
Investment demand has also strengthened.
Indian gold exchange traded funds recorded net inflows of INR44.5 billion, equivalent to approximately US$466 million, in September. This was the strongest monthly inflow in seven months.
ETF holdings increased by nearly three tonnes during the month, reaching approximately 124 tonnes. Inflows continued during the first half of October, adding an estimated 1.2 tonnes.
The increase suggests that some investors viewed September’s price decline as an opportunity to increase their gold exposure.
However, investment demand is not uniform across all products. Purchases of gold bars and coins reportedly moderated as price momentum eased, while digital gold purchases remained firm.
The World Gold Council also reported that India’s digital gold purchases reached 1.7 tonnes in September, up 5% month on month according to its headline summary. Year to date, purchases totalled 16.3 tonnes, compared with 9.2 tonnes during the corresponding period of 2025.
For more on this trend, read FirstGold’s coverage of gold demand reaching record values as investors turn to bars and coins and gold ETF demand remaining strong despite a price correction.
Temporary restrictions on some gold fund subscriptions
India’s mutual fund industry introduced a temporary suspension of fresh and additional subscriptions into certain gold savings funds and gold fund of funds from 16 October 2026.
The restriction does not apply to redemptions, existing systematic investment plans or direct investments into gold ETFs. Its precise impact on overall investment demand remains uncertain, although the World Gold Council expects the near term effect to be relatively modest.
This development highlights the distinction between demand for gold itself and the financial products through which investors obtain exposure to it.
Investors can access gold through ETFs and other financial products, while physical bullion provides direct ownership of the metal. Each approach has different costs, structures and risks.
Gold imports fall sharply
Despite the approaching festive season, India’s gold imports declined substantially in September.
Import value fell to approximately US$1.8 billion, down 22% month on month and 81% year on year. Estimated gross import volumes were around 20 tonnes.
The World Gold Council suggests that greater domestic availability, including recycled gold from jewellery exchange programmes, may have contributed to the decline.
Lower imports do not necessarily indicate weaker underlying consumer interest. Domestic recycling, changes in inventory and the timing of purchases can all influence how much newly imported gold is required.
What does India’s gold market tell us?
India’s latest market conditions demonstrate how gold demand can remain resilient even when prices experience significant corrections.
Jewellery demand is gathering momentum ahead of the festive and wedding season. ETF inflows have strengthened, digital gold purchases remain firm and retailers are reporting healthy revenue growth.
At the same time, elevated prices continue to influence consumer behaviour, investment products face regulatory changes and imports have declined sharply.
For Australian bullion holders, India’s market is one important part of the global picture, alongside central bank purchases, investment flows, interest rates and currency movements.
FirstGold recently examined how central banks continue buying gold and why physical demand remains the bigger story behind gold prices.
The broader message is that daily price movements are only one part of the gold market. Physical demand, investor behaviour and the availability of metal also help shape its longer term direction.
For Australians interested in accumulating physical bullion, understanding these underlying trends can provide useful context when considering their own purchasing approach.
Explore the FirstGold live precious metals prices to see the difference between international spot prices and physical bullion pricing.
Disclaimer: This article is for general information and educational purposes only and does not constitute financial advice. Gold prices can rise or fall, and past market behaviour does not guarantee future performance. Investors should consider their individual circumstances before making financial decisions.
