Investment share in India’s gold consumption increased to 42% in CY25 from 29% in CY24, driven by rising investment demand in gold ETFs and bar-and-coin purchases. This surge reflects safe-haven demand, diversification motives, and geopolitical uncertainty, according to a report. Global gold demand hit a record high in CY25, reaching around 5,000 metric tonnes, marking an 8% year-on-year increase, primarily fueled by robust investment demand despite higher gold prices and macroeconomic challenges.
“Geopolitical uncertainty, momentum in gold prices, and portfolio diversification preferences are expected to sustain investment demand for gold,” stated Akhil Goyal, Director at CareEdge. The report projects gold’s share in overall consumption to be between 35-40% in FY27. Despite record gold prices, Indian jewellery demand remains strong, with purchases rising by approximately 10% year-on-year to Rs 4.8 lakh crore in CY25.
The ratings agency forecasts a 35% year-on-year revenue growth for listed jewellers in FY26 and anticipates a 20-25% growth in FY27, driven by store expansions and market share gains from the formalization of the sector. It also projects an increase of 170-200 basis points in the average gross profit margin for FY26, attributed to inventory gains on unhedged gold. Annual global investment demand in CY25 reached 2,175 metric tonnes, surpassing the previous record set in CY20, with ETF investments leading the surge at 800 MT.
The demand for gold was driven by asset diversification amid heightened geopolitical risks and safe-haven preferences. India mirrored this trend with substantial ETF investments over the past two years, adding 37.5 tonnes in CY25, surpassing the combined investments of the last decade. Central banks continued to accumulate gold on a large scale for the fourth consecutive year, emphasizing gold’s significance in reserve diversification amidst geopolitical uncertainties. Global gold consumption witnessed a notable shift, with the share of jewellery consumption dropping by approximately 19% year-on-year to 33% in CY25, significantly below the 15-year average. In the Indian market, the share of jewellery consumption fell below 60% of total gold purchases in CY25, deviating from the long-term average of around 70%.
