Gold Prices Stay High as Festive Jewellery Demand Picks Up in India

India’s jewellery market is entering the festive season with signs of improving consumer interest, but elevated gold prices are continuing to influence what buyers purchase and how much they spend.

In Mumbai’s Zaveri Bazar, some consumers who had postponed purchases because of high gold prices are returning to jewellery stores as the festival season gets underway. Ganesh Chaturthi, followed by Navratri, Dhanteras, Diwali, Durga Puja and the winter wedding season, typically creates a strong period for jewellery retailers.

However, industry participants expect the current season to be different from previous years in one important respect: customers may continue to buy, but many are likely to opt for lighter jewellery, smaller pieces and lower-karat products to keep purchases within their budgets.

Festive Jewellery Demand Shows Early Signs of Recovery

The first half of the year was challenging for parts of the jewellery industry as high gold prices made consumers more cautious.

Aditya Modak, Director at PNGS Reva Diamonds, a sister company of PN Gadgil & Sons, said the company was entering the festive season with a cautiously positive outlook.

According to Modak, elevated gold prices had made consumers more price-conscious and encouraged a shift toward lighter-weight purchases. He said consumer sentiment was improving as the festive and wedding seasons gained momentum.

Prithviraj Kothari, President of the India Bullion and Jewellers Association (IBJA), also pointed to stronger buying activity around Ganesh Chaturthi.

Kothari said footfall had improved compared with the softer trend earlier in the year, with consumers returning for auspicious purchases as well as lightweight, everyday-wear jewellery.

High Gold Prices Could Keep Jewellery Volumes Under Pressure

While demand may improve sequentially during the festive period, high precious-metal prices remain a major constraint.

Jewellers interviewed by The Indian Express expect customers to buy smaller quantities than they might have purchased at lower prices. Some buyers may also reduce the weight of individual pieces while maintaining their overall spending budget.

Colin Shah, Managing Director of Kama Jewelry, estimated that jewellery volumes could decline by around 10–15%, while the higher value of each purchase could offset some of the decline in quantity.

Modak expects jewellery demand to improve progressively through the festive and wedding period. He said his business was targeting high-single-digit to low-double-digit growth in value, while volume growth was expected to be more moderate because of elevated precious-metal prices.

The key shift, according to Modak, is that consumers are seeking greater design value while keeping the overall purchase within a comfortable budget.

Why Jewellery Sales Can Rise Even When Volumes Fall

Higher gold prices create an unusual dynamic for jewellery retailers.

A customer purchasing fewer grams of gold can still spend as much—or potentially more—than in an earlier period because the underlying metal is significantly more expensive.

This means retailers can report higher sales value even when the physical quantity of jewellery sold is lower.

Kothari offered a more optimistic volume assessment, expecting 15–20% year-on-year growth during the festive season as pent-up demand combines with improving consumer sentiment. He nevertheless noted that demand would remain below the levels seen before the sharp rise in gold prices.

The differing estimates illustrate the uncertainty surrounding the current festive season.

Buyers Are Shifting Toward Lighter Jewellery

High gold prices have changed purchasing preferences.

Consumers are increasingly looking at:

• Lightweight gold jewellery
• Smaller ornaments
• Lower-karat gold
• Studded jewellery
• Everyday-wear designs
• Products offering more design value for the same budget

Some customers are also exchanging or selling old gold to finance new jewellery purchases.

This allows households to participate in festive and wedding purchases without having to fund the entire purchase from fresh savings.

Gold Prices Remain Well Above Last Year’s Festive Levels

Gold remains considerably more expensive than during the corresponding festive period last year.

According to the figures cited in the source report, MCX gold futures had reached around ₹2.3 lakh per 10 grams earlier in 2026 before subsequently declining. The contract was trading at approximately ₹1.5 lakh per 10 grams during the week referenced in the report.

By comparison, gold was trading around ₹1.2 lakh–₹1.3 lakh per 10 grams during last year’s festive season.

The comparison helps explain why consumers are adjusting the size and composition of their jewellery purchases despite the recent decline from the year’s peak.

Why Gold Prices Matter to Jewellery Buyers

Gold prices affect jewellery demand in two ways.

First, a higher metal price directly increases the cost of each piece. Second, consumers who have fixed budgets may respond by buying less gold rather than increasing their spending proportionately.

That is why jewellers are increasingly focusing on lighter products and designs that offer a stronger perceived value without requiring large quantities of gold.

The same environment can also favour organised retailers that have greater access to capital, broader inventories and stronger purchasing power.

Larger Jewellery Chains Gain an Advantage

The high-price environment is putting additional pressure on smaller, independent jewellery stores.

Large organised jewellery chains generally have stronger balance sheets, higher purchasing volumes and greater ability to offer promotional discounts. They can also invest more heavily in product development, marketing and new designs.

Kama Jewelry’s Shah said the jewellery industry is becoming increasingly organised and that larger retailers are expected to gain market share as this process continues.

For customers making expensive purchases, brand trust and perceived reliability can also become more important when gold prices are elevated.

Smaller Jewellers Face Cash-Flow Pressure

Independent jewellery retailers face a different set of challenges.

A small jeweller in Mumbai’s Zaveri Bazar told The Indian Express that limited cash flow makes it difficult to match the discounts offered by larger chains. Rising costs for workers and craftsmen add to the pressure.

The shop owner said regular customers had reduced their visits and that the business was responding by focusing on lower-weight pieces, studded jewellery and new designs.

Another worker at a small jewellery shop described a noticeable decline in footfall, saying that sales that once involved 10–15 pieces could now be closer to four or five on some occasions.

These individual accounts reflect the challenges faced by smaller retailers, although they should not be treated as a measure of the entire jewellery market.

Festive and Wedding Seasons Could Support Demand

The months ahead are traditionally important for India’s jewellery industry.

Ganesh Chaturthi provides an early boost in markets such as Maharashtra, while Navratri, Dhanteras, Diwali and Durga Puja are followed by a strong wedding period across many parts of the country.

This seasonal cycle could help release some of the demand that was postponed when gold prices were closer to their recent peaks.

However, the extent of the recovery will depend on how consumers respond to still-elevated metal prices.

The Jewellery Market Faces a Split Outlook

India’s jewellery sector is therefore entering the festive period with two contrasting trends.

Demand sentiment is improving, and some consumers who delayed purchases are returning to stores. At the same time, high gold prices are changing the composition of demand, with buyers looking for lighter pieces, smaller purchases and more affordable designs.

For organised jewellery chains, the environment could create opportunities to gain market share as consumers place greater emphasis on trust, discounts, product variety and design.

Smaller retailers, meanwhile, face tighter cash flows and greater difficulty competing on price.

The festive season will show whether improving consumer sentiment can translate into a sustained recovery in jewellery volumes—or whether high gold prices will continue to limit the quantity of gold Indian consumers are willing to purchase.