India's gold demand dips 6% in Q2 2026 as high prices bite, says WGC

India's love affair with gold hit a price bump in the second quarter of 2026. The World Gold Council (WGC) reported on Thursday that gold demand in the country fell 6% in volume terms for the April-June period compared to the same quarter last year.

Consumers bought less gold, but paid significantly more for it. The value of gold demand surged 50% in the quarter, a direct consequence of record-high domestic prices. The WGC's Gold Demand Trends report for Q2 2026 laid out a clear picture of a market caught between tradition and economic reality.

High prices drive a consumer pullback

Indian households and investors bought 6% less gold by weight in the three months to June. The WGC attributed the dip to volatile and elevated prices. Retail buyers, particularly in rural areas, deferred purchases. Many expected a price correction that did not materialise.

Jewellers reported slower footfall during key wedding periods. Gold loans and bar purchases also saw a decline. The only segment that held up was investment in gold ETFs, which saw a modest uptick as some investors sought to ride the price wave.

Despite the volume drop, the total amount spent on gold reached a record for the quarter. Indians spent roughly 50% more in rupee terms than they did in Q2 2025. The WGC noted that higher prices effectively squeezed the same value out of fewer grams.

Global picture: flat but divergent

Worldwide, gold demand was flat at 1,269 tonnes in Q2 2026. The number masks a split story. Central bank buying continued at a healthy clip, though slightly below the frenzy of the previous year. China's demand softened as its economy slowed. Europe saw retail investors sell some bars and coins to lock in profits.

India's performance was a key drag on the global volume number. The country is the world's second-largest gold consumer, and its demand trends have outsized influence on the global market.

The WGC's data showed that the average gold price in the quarter was sharply higher year-on-year. This has made jewellery and bars more expensive in nearly every major market.

What the numbers mean for the market

The 6% drop in India is significant, but not catastrophic. Demand of roughly 140-150 tonnes for the quarter remains healthy by historical standards. The bigger story is the value shift. Indians are treating gold more as a store of value than a consumption item at current prices.

Industry insiders say the marriage season and the upcoming festival of Dhanteras in the third quarter will be the real test. If prices stay high, demand volume could remain under pressure. If they ease, pent-up buying could return in force.

The WGC report also highlighted that scrap supply in India rose as some holders sold old jewellery to take advantage of high prices. This recycled gold partially offset the drop in new demand.

Looking ahead, all eyes are on the Reserve Bank of India's policy stance and global interest rate signals. Gold prices are expected to remain sensitive to the dollar and to geopolitical tensions. The third quarter will reveal whether Indian consumers have adjusted to the new price normal or will continue to hold back.