Daijiworld Media Network – New Delhi
New Delhi, Jul 1: Gold demand in India has fallen by more than 70 per cent following a sharp correction in prices, with many households opting to sell old jewellery instead of making fresh purchases, according to the India Bullion and Jewellers Association (IBJA).
Gold prices have declined by nearly Rs 50,000 per 10 grams from their record highs earlier this year. On Wednesday, MCX gold was trading at around Rs 1,42,546 per 10 grams, significantly lower than its all-time intraday high of Rs 1,92,991. In the international market, spot gold fell 0.6 per cent to $3,981.69 an ounce after touching a seven-month low.
IBJA Secretary Surendra Mehta said the slowdown in demand followed the government's decision to raise customs duty on gold from 6 per cent to 15 per cent in May. He also attributed the subdued demand to Prime Minister Narendra Modi's appeal urging citizens to defer gold purchases for a year.
The decline in prices has prompted many consumers to monetise existing gold holdings rather than buy new jewellery. According to industry estimates, sales of old gold jewellery during the April-June quarter touched nearly 50 tonnes, more than 50 per cent higher than the corresponding period last year.
Mehta said many consumers and investors are selling gold amid concerns that prices could decline further.
Globally, gold has remained under pressure as expectations of prolonged higher US interest rates have strengthened the dollar and reduced demand for the precious metal, which does not offer interest income.
According to Dr Renisha Chainani, Head of Research at Augmont, gold has fallen for four consecutive weeks and is nearly 30 per cent below its January 2026 peak. She attributed the decline to a combination of a hawkish US Federal Reserve, persistent inflation and a stronger US dollar.
She noted that while geopolitical tensions, including the recent US-Iran conflict, briefly supported gold prices, rising crude oil prices shifted investor attention back to inflation risks and the possibility of further interest rate hikes.
Experts said the near-term movement in gold prices will depend largely on upcoming US economic data, particularly employment and inflation figures, which could influence the Federal Reserve's monetary policy.
Analysts advised investors against making large one-time purchases despite the sharp correction, recommending a gradual investment approach instead of trying to predict the market bottom.