NEW DELHI, Jan 17, 2026, 06:47 IST
- The World Gold Council reports that India’s demand remains steady, driven by investment purchases and record ETF inflows in December.
- India gold futures dipped on Jan. 16 following some profit-taking, as Comex gold retreated from its record highs earlier this week.
- Analysts caution that the next shift could be abrupt, driven by clashing inflation worries and political tensions.
India’s gold market remains resilient despite prices hitting new highs, the World Gold Council reported in its Jan. 16 update. Investment demand is taking up some of the slack usually caused by soaring jewellery costs.
It’s crucial now, with India at the heart of physical demand and imports. Any shift in purchasing can send ripples through local premiums, the trade deficit, and the broader bullion market.
The country’s gold demand is also shifting in format. While shoppers are cutting back on weight and purity in jewellery, ETFs and “digital gold” are drawing in fresh funds, changing how the rally impacts the real economy.
Gold kicked off 2026 with a strong surge. The council reported international prices climbed nearly 6% in the opening 13 days, hitting several record highs and pushing past $4,600 an ounce. Domestic prices followed suit, reaching around 139,799 rupees per 10 grams.
Jewellery buying remains steady, though the mix is shifting. The council noted that high prices are steering customers toward lighter items with lower making charges. It also highlighted growing interest in lower purity options like 18-carat and 14-carat as buyers become more price conscious.
The market is increasingly relying on recycling. Some retailers informed the council that old gold exchange accounts for over 40% of jewellery sales, indicating that households are financing new buys by trading in existing pieces instead of paying outright in cash.
Listed jewellers saw robust revenue growth in the October–December quarter, the council reported, with year-on-year increases between 37% and 51% among major chains like Titan Company, Kalyan Jewellers, and Senco Gold. The council noted that much of this jump was driven by price, as average selling prices rose over 15% during the quarter despite a drop in volumes.
Investment flows took center stage. The council reported that Indian gold ETFs—exchange-traded funds backed by physical gold—saw net inflows of 116 billion rupees ($1.29 billion) in December, hitting a record high. This pushed total holdings to roughly 95 tonnes by the end of 2025.
Digital gold is making headway as well. The council reported that purchases through UPI, India’s instant payments platform, climbed steadily throughout 2025, with transaction values hitting 21 billion rupees in December, up from 8 billion rupees in January. This growth held firm despite a November dip after regulators warned that digital gold falls outside current market regulations.
India’s central bank dialed back its gold purchases amid the rally. The Reserve Bank of India added just 4 tonnes in 2025—the smallest increase in eight years—according to the council. Still, total holdings climbed to a record 880.2 tonnes, lifted by higher prices and valuation gains.
Gold prices showed volatility on Jan. 16. On India’s Multi Commodity Exchange, February gold futures dropped 520 rupees, or 0.36%, to 142,601 rupees per 10 grams, according to the Times of India. Meanwhile, Comex February gold futures eased $21.9, settling at $4,601.8 an ounce, after hitting a record peak of $4,650.50 on Jan. 14.
Satendra Singh reported on Investing.com on Jan. 15 that gold futures are “near the advent of a directional move.” Inflation fears and political risk stand out as key influences, alongside geopolitical tensions around Iran and speculation about mounting pressure on the U.S. central bank. https://in.investing.com/analysis/gold-fut…
India’s import bill has climbed despite a drop in volumes, according to the council. December’s import value hit roughly $4.1 billion, with volumes falling to an estimated 35 to 40 tonnes from 48 tonnes in November, showing the effect of elevated landed prices.
But the rally is beginning to take its toll. The council noted that high prices have already dampened jewellery volumes and reduced ticket sizes. Increased volatility might drive buyers toward exchange-traded and lower-purity items—or halt purchases completely if budgets tighten.
Looking ahead, the council pointed to seasonal festivals and weddings as potential boosts for jewellery sales, but it warned that investment demand will likely stay the dominant force amid ongoing uncertainty.
