Jewellery Buyers Pivot To Recycling, Lightweight Designs As Gold Prices Soar

Gold’s surge past Rs 1 lakh per 10 grams is reshaping buying patterns in India, with more shoppers recycling old ornaments and opting for lighter pieces as they adapt to record prices.

A chart tracking retail gold prices in Mumbai over the past century says, “Please don’t stop your wife from buying gold ornaments.”

Gold prices in retail markets across the country surged to a historic high of more than Rs 1 lakh per 10 grams last Tuesday, driven by strong safe-haven and investment demand for the yellow metal. Despite some easing a day later, prices are expected to remain elevated. The precious metal price on Monday was around Rs 99,290 per 10 grams.

Consumer perceptions are shifting. Amid a reduction in demand for jewellery, more customers are opting to recycle existing gold jewellery to make new pieces rather than buying afresh, said Kumar Jain, national spokesperson at the India Bullion and Jewellers Association Ltd. Alternatively, customers are opting for lightweight jewellery, he said.

Jeetu Jain, who runs UT Zaveri and Sons at Zaveri Bazaar, said demand is now about 25–30% of what it was before the sharp surge in prices. Customers are either opting to recycle their gold to make new pieces or are making jewellery in 14-carat gold, he said. If opting for 22-carat gold, they are choosing lightweight jewellery, he added.

Anecdotal reports suggest that 40–45% of purchases now involve some form of exchange, according to a blog post by the World Gold Council dated April 17.

When asked how prices have impacted spending, Nisha Bokaria, a customer at Zaveri Bazaar, said she is now buying less, opting instead for either lightweight jewellery or skipping gold jewellery altogether for silver or artificial jewellery.

Meena Devi, another housewife shopping at Zaveri Bazaar, said with a wedding at home, she has no choice. “Shaadi hai, gold to lena hai.” (It is a wedding; we have to buy gold.) In our village, daughters are given at least half a kg of gold at their weddings, she added. “Jiskey ghar main bati haun wo shaadi kaise kare?” (How can a wedding take place without gold in the house where a daughter is born?)

While high gold prices have tempered demand at lower price points, the premium segments have remained fairly resilient, according to the World Gold Council. Average transaction values reportedly rose by 15–20% year on year.

There was also an uptick in old gold exchanges, which contributed to overall sales volumes, Kavita Chacko, Research Head–India, World Gold Council, said. Corporate retailers continued their aggressive store expansion strategy, adding 10 to 30 new outlets during the quarter and reinforcing the growing presence of organised players in the jewellery sector, she added.

Jeetu Jain said he expects gold to touch Rs 1.5 lakh per 10 grams in retail markets by year-end. Amid a dull market, he said he has been advertising his store’s lightweight jewellery through mediums such as WhatsApp to lure back customers, telling them prices are set to rise further still.

Kumar Jain said he expects gold to climb to Rs 2 lakh in the next six months. However, demand is likely to see some improvement, he said. Jewellers including Jain expect some recovery in demand during Akshaya Tritiya and over the wedding season.

Amid broader financial market turmoil and uncertainty, gold’s role as a store of value is becoming more pronounced, reflecting a shift in consumer behaviour from consumption-driven purchases to wealth preservation, according to Chacko.

Prices are expected to remain elevated in the coming months. According to a podcast by Morgan Stanley hosted by Amy Gower, Head of Metals and Mining Commodity Strategy, gold still has room to run. Gold’s rally in 2024 was driven largely by strong central bank demand as well as the start of the US Federal Reserve rate-cutting cycle and strong demand for bars and coins as geopolitical risk remained elevated, the podcast explained. These trends have continued into 2025, with rising tariff uncertainty also contributing.

While the rally in gold is set to continue, it could initially fall alongside other asset classes, as it is often used to provide liquidity. However, this is often short-lived, and gold has already been rebounding, the podcast added.

One estimate by Morgan Stanley pegs the price of gold to rise further to around $3,500 per ounce by the third quarter of this year, driven by strong physical demand from central banks and the return of exchange-traded funds (ETFs).

Macro drivers are also contributing to this gold price outlook. A falling US dollar usually acts as a tailwind for commodities in general, making them cheaper for non-dollar holders, while a stagflation scenario — where growth expectations are skewed down and inflation risks are skewed up — would also be a set-up where gold performs well.

Continued demand for gold as a safe-haven asset amid rising inflation and growth risks is likely to keep the bar and coin segment well supported.