Indian consumers continued to spend on gold jewellery despite record-high prices, with total jewellery demand rising nearly 10% year-on-year to ₹4.8 lakh crore in CY25, according to CareEdge Ratings. The growth in value terms highlights a willingness among buyers to allocate a larger share of their wallet to gold purchases.
However, the surge in prices has weighed on volumes, which declined by around 15% during the year. This divergence reflects the price-sensitive nature of jewellery demand, with consumers increasingly opting for lower-carat and lighter-weight pieces to manage budgets, particularly during weddings and festive occasions.
Global gold demand hits record high
Globally, gold demand reached an all-time high of around 5,000 metric tonnes in CY25, marking an 8% year-on-year increase. The surge was largely driven by robust investment demand amid heightened geopolitical and macroeconomic uncertainties.
Gold ETF holdings saw a sharp rise of 801 metric tonnes, the second highest on record, while bar and coin investments touched a 12-year high, underlining gold’s appeal as a safe-haven asset. Central banks also continued aggressive accumulation for the fourth consecutive year, reinforcing gold’s role in reserve diversification.
Shift in consumption patterns
The composition of global gold demand is undergoing a structural shift. Jewellery’s share has dropped to approximately 33% in CY25, significantly below its long-term average of about 50%, as high prices dampen discretionary purchases.
A similar trend is visible in India, where jewellery’s share in total gold consumption fell below 60% in CY25, compared to a historical average of around 70%. In contrast, investment demand has surged, with its share rising to 42% from 29% a year earlier, driven by ETFs and bar-and-coin buying.
High-price regime likely to persist
CareEdge Ratings notes that gold prices have entered a more durable high-price regime, supported by structural demand shifts rather than short-term speculative flows. Sustained central bank buying and ongoing global uncertainties are expected to keep prices elevated over the medium term.
Branded jewellers set for strong earnings momentum
Branded jewellery players are poised to benefit from these trends, with CareEdge projecting robust revenue growth of around 35% in FY26 and 20–25% in FY27. The growth will be driven by aggressive store expansion, rising formalisation of the sector, and continued consumer preference for trusted brands.
Margins are also expected to improve in the near term, with average gross margins likely to expand by 170–200 basis points in FY26, supported by inventory gains on unhedged gold. However, profitability is expected to normalise in FY27, with gross margins stabilising in the 14–14.5% range.
Operating profitability (PBILDT) is projected to remain in the range of 6.5–7%, impacted by front-loaded costs associated with new store additions.