India’s gold buyers are adjusting their habits as the metal posts its biggest annual gain in 46 years. Consumers are increasingly favoring coins, bars, and gold-backed ETFs over traditional jewellery to avoid high making charges.

For decades, Mumbai homemaker Prachi Kadam bought gold jewellery during festive seasons, but this year she opted for a 10-gram gold coin instead. “It’s hard to justify paying an additional 15% in making charges,” she said, highlighting a sentiment shared by millions of Indians for whom festival gold purchases are customary.

Global factors such as U.S. interest rate cuts, a weaker dollar, and strong safe-haven demand drove gold prices up 67% in 2025, reaching a record $4,549.7 per troy ounce on December 26. Domestic gold prices rose 77% this year, far outpacing the Nifty 50 index, aided by a 5% rupee depreciation against the dollar.

Changing Consumer Preferences
The analysts also pointed out that the rise in gold prices is leading to the transformation of consumer habits and at the same time, it is softening the demand drop in total. A big segment of the buyers is going for light-weight or low-carat jewelries in order to manage their expenses but still keeping a foot in the traditional purchases.

A lady from Kolkata, Nibedita Chakraborty, mentioned that her family now is selecting the lighter designs as the way to cope with the increased prices. “A six or seven grams cut of the weight of a necklace can bring a saving of more than 100,000 rupees ($1,114),” she commented.

Saurabh Gadgil, chairman of P N Gadgil Jewellers, noted that lightweight, lower-carat designs are becoming aspirational. “Buyers want pieces that allow them to participate in gold ownership without feeling price pressure,” he said.

Shift Toward Investment Gold
The World Gold Council reported a 14% decline of India’s total gold demand during the first three quarters of 2025. Consumption for jewellery accounted for a lion’s share of this fall, which led to a reduction of consumption by 26% to 278 metric tons, whilst demand for gold as an investment rose by 13% to 185 tons. Investment in gold is now the largest share of total demand at 40%, clearly signifying that gold continues to be the best option for the wealthy to keep their money safe.

The president of the India Bullion and Jewellers Association, Prithviraj Kothari, envisions that gold coins, bars, and ETFs will continue to trend investment aside for 2026. Indian listed gold ETFs had $3.3 billion in inflows this year, which is equal to 28.7 tons, and so the total holdings have increased to 86.2 tons.

The widely recognized consultancy, Metals Focus, has predicted that gold consumption for jewellery could further fall by 9% in 2026, as the issue of affordable price is driving the market towards lower-carat and light-weight designs. Santosh Kataria, the chairman of DP Abhushan Ltd., pointed out that the younger generation and the working-class people are, however, becoming more and more willing to wear 14-carat and 18-carat gold for daily use.

This migration is an intricately choreographed act among the three factors of tradition, investment, and affordability, which indeed is a decisive factor for the future of India’s gold market.