India's Gold Demand Set to Hit Five-Year Low Amid Rising Prices

India's appetite for gold is anticipated to reach its lowest level in five years by 2025 as escalating prices deter jewellery shoppers, according to the World Gold Council (WGC). Investment demand sees a modest uptick, failing to balance the decline in jewellery purchases.

Sachin Jain, CEO of WGC's Indian operations, projected the country's gold demand to range between 600 to 700 metric tons in 2025, the least since 2020 and a decrease from 802.8 tons last year. Should prices stabilize, demand could peak at 700 tons; however, geopolitical price hikes of 10%–15% might restrict it to the lower end.

June saw record local gold prices, leading to a 10% drop in April-to-June gold consumption, with jewellery demand plummeting by 17%, while investment climbed by 7%. September-quarter demand is also slated to fall short of the previous year's 248.3 tons. Despite the price surge, gold has attracted investors preferring physical gold and ETFs, Jain noted.

(With inputs from agencies.)