The World Gold Council (WGC) reports that the gold market is showing important trends as India approaches the festive and wedding season in 2026. This period usually boosts demand for gold, and recent price movements have influenced buying patterns. Lower gold prices have encouraged jewellery purchases, although high prices continue to restrict volume growth.
- Gold prices fell in September but stabilized in October.
- Domestic gold discounts narrowed, indicating better supply and demand balance.
- Festive and wedding season demand is increasing, with jewellers reporting strong orders.
- Gold ETFs saw significant inflows and investor participation rose sharply.
- Gold imports dropped sharply due to increased domestic supply and recycling.
How have gold prices changed recently?
In September 2026, gold prices dropped 8.5% month-on-month to $4,176 per ounce. This decline was influenced by higher US Treasury yields, a stronger US dollar, and reduced futures market activity. Despite this, global gold ETFs attracted strong inflows. In India, domestic gold prices fell by a smaller margin of 4.8%, ending at ₹1,47,613 per 10 grams. The rupee’s weakness helped cushion the price drop. In October, gold prices remained mostly stable, with a slight 1% decrease partly due to gains in the rupee.
What does the narrowing of domestic gold price discounts mean?
Domestic gold price discounts shrank sharply from an average of $66 per ounce in September to just $8 per ounce by mid-October. The WGC attributes this to improving seasonal demand. However, the continued discount compared to import parity prices suggests that domestic supply remains sufficient. Factors supporting supply include old-gold recycling and unofficial gold inflows. For buyers, the opportunity to purchase gold at a bargain compared to import prices has decreased, even as demand remains strong.
How is seasonal demand affecting the gold market?
The festive and wedding season is driving increased demand for gold jewellery. The recent price decline has helped support this trend. Jewellers report healthy order flows as retailers restock inventories. Marketing efforts have intensified, with a focus on fresh designs and lighter weight jewellery that is easier to wear. Old-gold exchange programs remain popular, with jewellers offering incentives to trade in old gold for new pieces.
What trends are seen in gold investment products?
Demand for gold bars and coins has slowed as price momentum eased. However, Indian gold ETFs recorded net inflows of ₹44.5 billion ($466.2 million) in September, the highest in seven months, adding nearly 3 tonnes of gold. In October, inflows continued with an estimated ₹17.22 billion ($181 million) in the first half of the month. Investor participation increased dramatically, with over 140,000 new folios added in September compared to about 4,000 in August. Despite this, the total assets under management in gold ETFs fell 2.5% due to the price decline.
New restrictions were introduced on October 16, 2026, suspending fresh subscriptions to gold savings funds or Fund of Funds (FoF) to reduce gold imports. Existing systematic investment plans (SIPs) and redemption requests remain unaffected. Direct investments in gold ETFs continue normally.
How have gold imports and digital gold demand changed?
Gold imports in India fell sharply in September to $1.8 billion, the lowest since March 2024. This was a 22% drop from August and an 81% decrease year-on-year. The decline reflects increased availability of domestic gold supply, including recycled gold from exchange programs, rather than a drop in consumer interest.
Digital gold demand remained strong, with purchases of ₹25.9 billion ($271 million) in September, up 4% from August and 83% higher than the previous year. Year-to-date digital gold purchases reached 16.3 tonnes, a 76% increase compared to the same period in 2025.
What is the outlook for gold demand during the festive season?
The WGC expects the festive and wedding season to create a favorable near-term demand environment. Lower gold prices support jewellery spending, but high price levels may continue to limit the growth in purchase volumes. Overall, the market shows positive signs of recovery and steady demand as India enters this important buying period.
