India's investment landscape is witnessing a major shift, with demand for gold investment surpassing jewellery consumption in the March quarter. This is a first time such a shift has happened, indicating that the domestic investors are seemingly turning towards precious metal amid volatility in equity markets, the World Gold Council said, as relayed by Reuters.
Investment demand in the March quarter surged as much as 52% on a year-on-year basis to 82 metric tonnes, whereas jewellery demand fell 19.5% to 66 tons, the WGC said in a report.
For the first time, investment demand accounted for a larger share of total consumption than jewellery, rising 54.3% of the quarter's total. This is quite significant as Indians have historically purchased gold as an ornament, rather than an investment instrument.
"For the first time investment demand surpassed jewellery demand," Sachin Jain, chief executive of WGC's Indian operations, told Reuters. "Investment demand will become increasingly prominent in the coming quarters, with both financial and retail investors showing more interest in gold."
The strong demand in gold investment partly offset a decline in jewellery sales, which was hit by a rally in prices. But overall, total gold consumption in the country rose 10.2% to 151 metric tonne during the quarter.
The shift has been led by Gold ETFs. Inflows into gold ETFs have risen 186% in the March quarter to record 20 tonnes, the WGC said. This was driven by weak returns in the stock market, coupled with a tempting run-up in gold and silver prices since the start of last year.
Indeed, domestic gold prices have nearly doubled since the start of 2025, while India's benchmark Nifty 50 has risen just 2.4% during the same period, making gold an increasingly compelling alternative for Indian investors.
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