India’s Gold Market Shows Signs of Recovery Ahead of Festive Season

India’s gold market is showing signs of strengthening after the sharp price correction seen in June, with jewellery demand, gold imports and investment activity all showing signs of improvement, according to the World Gold Council’s latest India market update.

Gold prices stabilised through July before recovering in early August. The LBMA Gold Price PM rose 9% during the first two weeks of August to US$4,391 per ounce, while domestic gold prices increased by nearly 7% to ₹151,744 per 10 grams as of 14 August. A weaker US dollar, changing expectations around monetary policy and renewed inflows into gold ETFs contributed to the recovery.

Jewellery demand begins to improve

The World Gold Council reported stronger jewellery demand as consumers responded to lower and more stable prices following the June correction. Industry feedback indicated improved footfall, a return of deferred purchases and higher order flows to manufacturers.

Retailers and manufacturers have also begun replenishing inventories ahead of the festive season, suggesting increased confidence in seasonal demand. Exchange of old gold for new jewellery continues to play an important role in supporting purchases and increasing the availability of recycled gold.

Gold ETFs continue to attract investors

Investment demand remained supportive despite moderating from earlier highs.

Indian gold ETFs recorded net inflows of ₹1,560 crore in July, down 55% month-on-month, while total holdings increased by one tonne to 120 tonnes. ETF assets under management rose 2% during the month to ₹1.733 trillion.

The positive trend continued into August, with estimated net inflows of ₹1,179 crore during the first two weeks of the month. Investor participation also increased, with 57,000 new folios added in July, taking the total number of gold ETF accounts to 12.53 million.

Futures activity picks up

Gold futures trading on the Multi Commodity Exchange of India also strengthened in July. Average daily trading volumes increased to 14.9 tonnes from an average of 13.5 tonnes over the previous three months, while average daily turnover rose 9% month-on-month to ₹214 billion.

Although trading activity remained below the elevated levels recorded earlier in the year, turnover was 35% higher than in July 2025, reflecting the impact of higher gold prices on traded value.

Imports rebound

India’s gold imports also recovered in July after two consecutive months of weakness. Import value rose to US4.16billion,morethandoubleJune’sUS1.97 billion. The World Gold Council estimates import volumes at approximately 40–45 tonnes, compared with around 20 tonnes in June.

The increase points to improving physical demand and inventory replenishment among manufacturers and retailers ahead of the festive season. However, gold accounted for around 5% of total merchandise imports in July, below the 11% average recorded during January–March.

With jewellery demand improving, imports recovering and investment interest remaining supportive, the World Gold Council expects conditions to strengthen ahead of the festive season, although elevated gold prices could continue to influence jewellery purchasing decisions.