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The World Gold Council (WGC) reported a significant increase in India's gold demand during 2024, reaching 802.8 tonnes—a 5% surge compared to the 761 tonnes consumed in 2023. This rise is attributed to several factors, most notably the reduction in import duty implemented in July. This duty reduction, coupled with the strong demand associated with traditional wedding and festival seasons, significantly boosted gold purchases throughout the year. The report, released on January 5th, 2025, also highlighted a substantial increase in the total value of gold demand, reaching ₹5,15,390 crore (approximately $62 billion USD, assuming an exchange rate of 83 INR per USD), representing a 31% jump from the ₹3,92,000 crore recorded in 2023. This increase demonstrates the significant purchasing power exerted within the Indian market, despite record high prices for the precious metal throughout the year. The price increase itself played a significant role in the overall value increase; however, it's important to note that the volume increase, driven by the factors mentioned above, also contributed substantially.
Looking ahead to 2025, the WGC projects gold demand in India to remain robust, albeit slightly lower than 2024’s figures. The council anticipates demand to fall within the range of 700 to 800 tonnes. This projection takes into account the expectation of continued wedding-related purchases, a key driver of gold consumption in India. However, the forecast hinges on a degree of price stability in the gold market. Significant price fluctuations could impact consumer behavior and influence the final demand figures. Sachin Jain, WGC's Regional CEO for India, emphasized the importance of price stability for sustaining the projected demand, suggesting that price volatility could dampen consumer enthusiasm. The upward trajectory of gold prices, reaching multiple record highs during the past year, has already influenced purchasing patterns to some extent.
A closer examination of the 2024 data reveals a nuanced picture of gold demand segments. While overall demand increased, the jewellery sector experienced a slight decline. Jewellery demand decreased by 2% to 563.4 tonnes in 2024, compared to 575.8 tonnes in 2023. This downturn, despite record-high gold prices, underscores the resilience of the market and the positive influence of the duty cut. Mr. Jain highlighted that many consumers strategically purchased gold jewellery towards the end of the third quarter, capitalizing on the duty cut, which partially offset the impact of the rising prices. This strategic timing suggests a degree of price sensitivity among consumers, indicating a potential responsiveness to future price adjustments. Furthermore, the subsequent price correction in November also attracted investors seeking more favorable purchasing opportunities. Despite the decrease in volume for jewellery, the value of gold jewellery demand likely still increased due to the higher prices.
The investment segment, however, showed remarkable strength, registering a significant 29% increase to 239.4 tonnes in 2024—the highest level since 2013. This increase highlights gold's enduring appeal as a safe-haven asset, particularly during times of economic uncertainty or geopolitical instability. The robust performance of the investment sector significantly contributed to the overall growth in gold demand, counterbalancing the slight decline observed in the jewellery market. This strong performance is largely due to consistent demand for gold ETFs, along with a surge in purchases during the Diwali and Dhanteras festival period (October/November). E-commerce platforms, offering quick delivery of small gold bars and coins, significantly boosted investment demand, particularly in major metropolitan areas. The Reserve Bank of India (RBI) further played a significant role, increasing its gold purchases more than fourfold in 2024, acquiring 73 tonnes compared to just 16 tonnes in 2023.
Gold imports in India also decreased by 4% to 712.1 tonnes in 2024, compared to 744 tonnes in 2023. This decrease could be attributed to several factors, including the strategic timing of purchases by consumers and the overall robust recycling market. This reduction in imports does not necessarily indicate weakened demand, as it is partially offset by the increased domestic recycling and strong investment demand. Gold recycling, however, showed a slight decrease of 2% last year, reaching 114.3 tonnes compared to 117.1 tonnes in 2023. Despite these minor fluctuations in certain segments, the overall gold demand in India remains strong, underpinned by a complex interplay of factors including cultural traditions, investor sentiment, and government policies. The WGC expects the trend of robust gold investment demand to persist, particularly in areas like gold ETFs, digital gold, and physical bars and coins, signaling a bright outlook for the Indian gold market in the coming years.
Source: Gold demand in India sees 5% rise at 802.8 tonnes in 2024, 2025 projection at 700-800 tonnes: WGC