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In 2025, global uncertainty and record gold prices reshape India’s festive gold rush, with investment demand rising and jewellery purchases falling.
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Authored by Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures:
India’s love affair with gold is cultural, financial and deeply seasonal. Festivals and weddings together account for a large share of annual jewellery demand, and every year retailers and consumers alike prepare for a predictable surge in purchases. Yet 2025 has shown how that familiar rhythm can be disrupted when global economic forces push gold prices to new highs, change investor behaviour, and alter domestic demand dynamics. Below I analyse the channels through which global uncertainty is shaping India’s festive gold rush and what the trade, policymakers and consumers should be prepared for.
Gold has rallied sharply in 2025 on a mix of safe-haven flows, a softer US dollar, and a highly uncertain geoeconomic backdrop. The World Gold Council reports double-digit gains and identifies a weaker dollar plus range-bound rates as key drivers of record returns in the first half of the year. Global forecasts and market commentary point to continued upside risk for bullion while macro uncertainty persists. At the same time, central-bank rhetoric around interest-rate paths and episodic geopolitical tensions produce short windows of volatility moments that spur both investment buying and consumer hesitation.
The impact of these global shifts on India comes through three transmission channels. First, the price channel: higher international prices are translated into elevated domestic rupee prices, which compresses mass-market jewellery demand even as investment purchases rise. Second, currency and import dynamics: a weaker rupee magnifies dollar-denominated gold gains for Indian buyers, while importers adjust their shipments to manage exposure. Third, substitution between investor and consumer demand: in uncertain times, retail investors increase allocations to bars, coins, and ETFs, while discretionary jewellery purchases are deferred or down-traded to lighter designs.
Recent numbers highlight this divergence. The World Gold Council’s mid-year analysis shows record-setting price action and notes a material reshaping of consumer and investor behaviour in India. Investment demand has been resilient even as jewellery volumes showed pressure. Reuters reported that India’s gold consumption fell in the April–June quarter, with jewellery demand down materially while investment demand rose. This is a clear sign that consumers are treating gold more like a portfolio hedge than a discretionary festive purchase.
For the upcoming festive season, the implications are significant. Retailers will likely adjust assortments to include more lightweight designs and smaller-value coins that meet both gifting and investment needs. Promotions will be more tactical, offering value-adds such as making-charge waivers and financing schemes rather than broad price discounts. Inventory risk management will become critical, with more conservative stocking to avoid losses from sudden corrections. Meanwhile, families making high-value purchases may opt for staged buying, lower weight pieces, or shifting some allocation to other assets if gold remains elevated.
From a policy perspective, gold is not just a consumer good; it is a strategic component of household balance sheets and national reserves. Central banks, including the RBI, have continued measured gold buying, which also affects market dynamics. Policymakers must ensure transparent import and duty signals, support formal retail channels, and encourage financial literacy. As retail investors increase allocations to gold, households should be informed about the differences between coins, ETFs, and sovereign gold bonds to make well-judged choices.
Looking ahead, three scenarios are possible. If global risk remains elevated, prices could stay high — supporting investment flows but suppressing discretionary jewellery demand. If central banks signal a clearer path to rate cuts and geopolitical tensions ease, prices may stabilise, allowing a recovery in festive purchases. Alternatively, a sudden correction would trigger a rebound in pent-up jewellery demand, with nimble retailers benefiting the most.
For consumers, the advice is clear: if buying for cultural reasons such as weddings, prioritise hallmarking and timeless designs over speculative timing. For investment purposes, diversify across physical and paper gold products. Retailers, on their part, should tighten inventory controls, expand smaller-denomination product lines, and communicate transparently about premiums. Policymakers and trade bodies must continue formalisation efforts and run consumer-education campaigns ahead of the festival window.
Gold in India sits at the intersection of culture, finance, and identity. Global economic uncertainty has made this intersection more visible: bullion markets respond instantly to macro shocks, while household decisions adjust more slowly. As Vice-President of IBJA and as a participant in the trade, I believe the industry’s response should be pragmatic and consumer-centred, adapting product mixes, improving transparency, and supporting households to make informed choices during what remains the most important jewellery season of the year. The festive gold rush will certainly look and feel different in periods of elevated uncertainty, but with the right mix of policy clarity and market innovation, it can remain a resilient pillar of India’s cultural and economic life.
By: Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures
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