India's gold jewellery demand plummeted 31% in the July-Sep quarter of 2025, the steepest fall globally, according to the Gold Demand Trends Report by the World Gold Council (WGC). This downturn had a pronounced impact on Gujarat's gems and jewellery markets. The yellow metal imports in Gujarat declined 85% in July and Aug, according to the latest available air cargo data. The high price of gold had families opting for lighter, lower-carat pieces during the peak of the festive season and preparations for the wedding season.

According to the WGC, India posted its weakest third quarter since 2020, with consumption slipping to 118 metric tonnes. This was due to gold prices surpassing Rs 1.2 lakh per 10 grams during the quarter, currently around Rs 1.26 lakh in Ahmedabad. Jewellers say that footfall declined in July and Aug, as the price rally, magnified by a weakened rupee, pushed the traditional 22-carat and heavy 24-carat pieces out of reach.

Conventional and more ornate 24-carat designs saw the sharpest fall, while lightweight and increasingly popular 18-carat pieces held up better. Retailers aggressively promoted pure gold items and high-end designs with enamel and gem accents to protect their profit margins, but the majority of consumers opted to trade in their old jewellery or delay new purchases. Wealthier households continued to buy expensive pieces, cushioning the top end, but overall sentiment stayed subdued, according to the World Gold Council.

September delivered the only spark of momentum. "In September prices were climbing almost every other day, and the combination of higher tariffs and heightened geopolitical tensions only pushed domestic rates further up, leading to a cautious buying mood this quarter. We saw a clear shift towards bullion and coins because many customers felt they shouldn't miss the rally, and preferred something closer to pure investment rather than heavier jewellery," said Jigar Soni, president, Jewellers' Association of Ahmedabad (JAA).

Even though it's the wedding season, demand for traditional 22-carat and heavily designed pieces has been unusually weak. "What's holding the market together is 14- and 18-carat jewellery, where innovative designs and lower ticket sizes offer some breathing room in terms of demand. At the same time, a significant share of purchases is happening through exchange, with people bringing in old gold to offset the higher cost of new pieces. That has become one of the only ways households feel comfortable buying in this price environment," said Hemant Choksi, general secretary, Manek Chowk Choksi Mahajan.

Interestingly, the WGC report shows a very different story on the investment side: demand for coins and bars jumped 20% to 91.6 MT in Q3, up from 76.7 MT a year earlier, as investors chased the price rally. Year-to-date investment demand has hit 184 MT, the strongest nine-month stretch since 2013 and almost at par with the post-Covid full-year average, according to the WGC.

Courtesy : TOI