Decreased Gold Demand Forecast for 2025 as Consumption Drops 12% in First Half by WGC
In a recent announcement, the World Gold Council (WGC) has revised India’s annual gold demand estimate for 2025, anticipating a range between 600 and 700 metric tons. This forecast marks a 5-year low, primarily due to record-high gold prices causing a sharp decline in jewellery consumption, despite a modest increase in investment demand.
Key details supporting this revision include:
- In the second quarter of 2025, gold demand was 134.9 tons, down 10% year-on-year.
- For the first half of 2025, total gold consumption volume fell by 12% to about 252 tons versus 288 tons in the previous year.
- Jewellery demand specifically dropped 17% in Q2 2025, while investment demand rose 7% in the same period.
- Gold prices surged sharply, with local prices hitting ₹101,078 per 10 grams in June 2025, up 28% year-to-date.
These factors led the WGC to revise its annual demand projection downward from previous estimates to the 600-700 tons range for 2025. It is important to note that total gold demand from January to June 2025 is approximately 253 tonnes.
Despite the decline in traditional jewellery demand, the WGC stated that gold remains an enduring safe-haven asset. The average quarterly global price per ounce of gold in Q2 2025 reached US$ 3,280.4, reflecting the ongoing global interest in gold as a store of value.
It is worth mentioning that gold imports into India in the June quarter decreased significantly, down 34% to 102.5 tonnes. However, the rise in investment demand, which increased by 7% to 46 tonnes in the same quarter, may suggest a shift in consumer behaviour towards investment-focused gold products.
The value of gold demand in Q2 2025 increased by 30% compared to the same quarter last year, despite a 10% decrease in physical gold demand volumes. This indicates that while the volume of gold purchased may have decreased, the value of the gold purchased has increased. Gold demand in value terms for Q2 2025 was Rs 1.21 lakh crore, 30% higher than the same quarter last year.
In the March quarter, the WGC had estimated the annual gold demand to be between 700 and 800 tonnes. The revised estimate for 2025 is a significant decrease from this earlier projection. The value of gold demand in the first half of 2025 was above Rs 2 lakh crore, a 26% increase compared to the same period last year, despite the decline in physical gold demand volumes.
In conclusion, the World Gold Council's revised estimate for India’s annual gold demand in 2025 underlines the impact of high gold prices on traditional jewellery consumption. However, the increase in investment demand suggests that consumers in India continue to view gold as a valuable asset worth investing in, even in the face of high prices.
Businesses in the finance sector should pay close attention to the revised Indian gold demand estimate for 2025, as it signifies a shift in consumer behavior towards investing in gold, despite the decline in traditional jewellery consumption due to high prices. This trend in investing suggests a potential increasing interest in the gold market and may present opportunities for various businesses, particularly in the gold industry.
