Will Gold Prices Fall Further As Demand Hits A Six Year Low In India - Latest Key Updates

Amidst the ongoing festive season in India, fluctuations in gold prices and a sharp decline in demand have surprised the market. On November 3, today, a drop of more than 1500 rupees has been witnessed in the price of gold, with the primary reason being a decrease in gold demand. A recent report by the World Gold Council has come to light, which has startled everyone. Due to high gold prices in India, demand has plunged to a six-year low level, causing prices to decline. There is also a possibility that this impact will be seen further in the coming days, meaning that gold prices may witness additional declines, while let us explain in detail what kind of information has been provided regarding gold demand in the World Gold Council report and how it's affecting general life.

World Gold Council Report And The Six Year Low Level

The World Gold Council, known as WGC, said on Tuesday in a significant statement that gold demand in India could fall to a six-year low in the year 2026, reaching approximately 650 tonnes. The main reason behind this is the record-breaking and high prices of gold, which are severely impacting jewelry sales and reducing the demand for gold as an investment, while india, the world's second-largest gold consumer country after China, is struggling with rising inflation caused by the Iran war. At the same time, due to a weak monsoon, jewelry demand in rural areas is feared to decrease. Sachin Jain, the Chief Executive of WGC's Indian operations, told Reuters in his statement that jewelry demand witnessed a decline in the first nine months of the year. As a result, total demand is likely to drop to approximately 650 metric tonnes, which will be the lowest level since the year 2020. It's worth recalling that in the year 2020, jewelry shops had to be closed across the country due to the COVID-19 pandemic.

Sharp Decline In Jewelry Sales And Investment Demand

5 metric tonnes. Within this figure, a 20 percent sharp decline was recorded in jewelry purchases and a 40 percent slowdown in investment demand. However, he also expressed hope that demand might witness some recovery in the December quarter, because people tend to buy gold due to major festivals like Diwali and the wedding season. Dussehra was celebrated in the country in the month of October, and Diwali is celebrated at the beginning of November, during which buying gold is considered very auspicious across the country. According to the report released by WGC on Tuesday, due to high gold prices and a weak monsoon, a sluggishness has persisted in the rural economy for a long time, which may keep gold demand quite limited.

Impact On Rural Economy And Income Levels

More than half of the demand for gold in India comes directly from rural areas, where jewelry is considered a traditional and safe medium for wealth accumulation for millions of people in the country, while during the monsoon in 2026, the lowest rainfall in more than a decade was recorded, which deeply impacted agricultural production and reduced the income of farmers in the country. Sachin Jain also stated that India's total gold imports decreased during the September quarter. Another major reason for this is that after the government increased the import duty on gold earlier this year, the influx of gold through informal channels without official records has increased. Due to the combined effect of all these factors, a new and uncertain phase is being witnessed in the gold market, causing both buyers and investors to adopt a cautious stance.