New Delhi: As India approaches its grand festive season, when households traditionally stock up on gold for auspicious occasions and weddings, the glitter of the yellow metal appears to be fading under the weight of soaring prices. Once a symbol of prosperity and cultural pride, gold has suddenly become too heavy for many middle-class budgets, raising fears that this year’s festive demand may fall to one of its lowest levels in recent memory.
For centuries, festivals such as Dussehra and Diwali have been incomplete without the sparkle of gold ornaments adorning family members or offered as gifts. Retailers eagerly await this time of year to recover annual sales, often accounting for a significant portion of their revenue. But this year, jewellers are sounding the alarm: demand may fall by nearly 10 to 15 percent in volume compared with last year, largely due to an unprecedented surge in bullion prices.
The market shock has been dramatic. Domestic prices recently touched a historic peak of around ₹109,840 per 10 grams, reflecting a staggering 42 percent rise since January. This surge follows a 21 percent increase in 2024, creating a two-year rally that has pushed gold firmly out of reach for many average households. Even though weddings and festivals compel families to purchase at least some gold, industry insiders warn that volumes will be sharply reduced, with many customers opting for lighter jewellery, smaller coins, or simply postponing purchases.
Last year, India witnessed a significant boost in gold sales during the December quarter, with purchases touching 265.8 metric tonnes. That surge was helped by the government’s decision to slash import duties from 15 percent to 6 percent. However, with global prices climbing relentlessly in 2025, this advantage has been eroded, making imports costly and retail jewellery less affordable.
Interestingly, while jewellery sales are under pressure, investment demand for gold is rising. Analysts note that as the metal has outperformed many asset classes this year, investors are gravitating towards exchange-traded funds, coins, and bars. For many, the psychological comfort of holding gold as a safe haven asset is proving stronger than its ornamental value. This shift suggests that gold is increasingly being seen less as jewellery and more as a financial instrument in uncertain times.
The broader economy is also affected. India, one of the world’s largest gold importers, may actually benefit on the trade balance front if jewellery demand weakens. A slowdown in imports could ease pressure on the current account deficit and support the rupee. At the same time, the government has attempted to stimulate consumer demand in other sectors, recently cutting goods and services tax on a range of products from daily essentials to small cars. While that may free up disposable income, industry experts doubt whether it will significantly soften the blow of high gold prices.
Retailers, however, are not giving up hope. Many jewellery houses are preparing innovative campaigns, introducing lightweight designs, and offering exchange deals to entice cautious customers. “The emotional value of gold cannot be discounted,” said one Mumbai-based jeweller. “Families will still buy, but they may buy less or look for smaller pieces. Our job is to keep gold within reach, even in challenging times.”
The months ahead will test the resilience of India’s deep-rooted gold culture. While volumes may shrink, the total value of gold purchases could still remain elevated due to record prices. Yet, for countless households, the dilemma is real how to balance tradition with economic reality. The sparkle of gold in the festive season may dim this year, but its symbolic weight in Indian life remains as unshakeable as ever.