Gold Jewellery Consumption To Shrink 10 Pc In FY26
Further, IMD’s prediction of a normal monsoon and favourable crop sowing are likely to support the rural economy and this in turn will keep gold jewellery demand from rural India relatively resilient amid elevated gold prices.
Chennai: Despite a resilient rural demand, gold jewellery consumption is likely to contract by 10 per cent in FY26, finds ICRA.
In volume terms, gold jewellery consumption is likely to be down by 10 per cent in FY26, continuing the trend of FY25. However, elevated gold prices will see jewellery demand in value terms going up by 12-14 per cent.
Higher number of auspicious days in FY2026 are likely to support wedding and festive demand, which contribute to over half of the domestic gold consumption.
Further, IMD’s prediction of a normal monsoon and favourable crop sowing are likely to support the rural economy and this in turn will keep gold jewellery demand from rural India relatively resilient amid elevated gold prices. However, these factors will not support the volume growth of gold jewellery.
On the other hand, elevated prices will retain the interest in gold for investment purposes and investment demand for bars and coins, which accounted for 31 per cent of the overall gold consumption in India in FY2025, is expected to rise further after a robust 25 per cent growth in FY2025.
After a 14 per cent and 33 per cent rise in domestic gold prices in FY2024 and FY2025 respectively, the price continues to rise in the current fiscal and is up by around 20 per cent so far compared to the average price in FY2025. The buoyancy in prices has been fuelled by the evolving global economic and geopolitical scenario, and rising investment demand for gold. However, ICRA expects gold prices to stabilise in the medium term.
Gold jewellery retailers may see slightly higher growth in revenues due to the accelerated formalisation of the industry. The 14 large jewellery retailers, which account for around 68 per cent of the organised market, are estimated to post a revenue growth of 14-16 per cent in FY2026, albeit with some moderation compared to around 18 per cent growth witnessed in FY2025.
“The persistent rise in gold prices, accelerated formalisation of the industry, planned store additions by large jewellers and changing consumer preferences in favour of branded jewellery are likely to drive the revenue growth in FY2026 despite a volume contraction,” ICRA said.
