India's gold market is undergoing a significant structural transformation, with investment demand projected to reach 35-40 per cent of total consumption by FY27, driven by global uncertainties and a desire for portfolio diversification.
Key Points
- Investment-led gold purchases are expected to constitute 35-40 per cent of total gold consumption in India by FY27, marking a structural shift.
- The share of jewellery consumption in India fell below 60 per cent in 2025, down from a long-term average of 70 per cent.
- Geopolitical uncertainty, gold price momentum, and portfolio diversification are key factors fuelling the rise in investment demand.
- Gold prices have entered a durable high-price regime, supported by structural demand shifts, official sector buying, and global uncertainties.
- Despite elevated prices, Indian jewellery demand remains resilient, increasing 10 per cent to Rs 4.8 lakh crore in 2025.
A higher number of Indians are now buying gold for investment purposes as compared to jewellery, and the share of such consumers is expected to rise to up to 40 per cent in the current fiscal year, a report said on Monday.
The share of jewellery consumption fell below 60 per cent of total gold purchases in 2025 compared to long-term average of 70 per cent, domestic rating agency Careedge said in a report.
Understanding the Structural Shift
Its director Akhil Goyal said this represents a "structural shift" in the country's gold buying patterns, as it is one of the largest consumers of gold globally.
"Geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue fuelling investment demand for gold, with its share in overall gold consumption is projected at 35-40 per cent in FY27," Goyal said.
At 60 per cent, the jewellery consumption is higher than the world average of 50 per cent, it said.
Factors Driving Investment Demand
Investment demand surged to record levels in India led by gold ETFs (exchange traded funds) and bar-and-coin buying, reflecting safe-haven demand among other factors, it said.
The agency feels gold prices have entered a more durable high-price regime supported not by short-term speculative flows but by structural demand shifts, sustained official sector buying and persistent global macroeconomic and geopolitical uncertainty.
However, despite the elevated prices, Indian jewellery demand remains resilient, it said, adding that the same rose 10 per cent to Rs 4.8 lakh crore in 2025.
