Festive Season, GST Cuts Seen Driving Gold Jewellery Demand In India

Festive season demand, cultural factors, and recent GST reforms are expected to lift gold jewellery purchases in India, even as gold prices remain at record highs, according to a report by Mirae Asset Mutual Fund.

India and China together account for more than 50% of global jewellery demand, the report highlighted. While festive and wedding-related purchases could keep Indian demand resilient, a recovery in consumer spending and government stimulus measures may also revive urban jewellery demand in China.

However, Mirae cautioned that persistently high prices could act as a drag. With gold trading above USD 3,500–3,600 per ounce, price elasticity may cap the pace of recovery. “We expect gold to continue moving higher from current levels, though

we remain cautiously optimistic as corrections may be triggered by price sensitivity,” the fund house said.

Globally, gold extended its rally in August 2025, closing the month at USD 3,429 per ounce — a 3.9% monthly gain and more than 31% rise year-to-date, as per World Gold Council (WGC) data. The yellow metal has since climbed past USD 3,700 per ounce, supported by a weak US dollar, strong inflows into gold-backed ETFs, and persistent geopolitical tensions.

Back home, gold prices on the Multi-Commodity Exchange of India (MCX) are hovering around Rs 1,09,000 per 10 grams, marking a sharp rise since the start of 2025. India’s gold market performance has outpaced several peers, reflecting robust investment inflows and steady domestic appetite despite elevated prices.

Silver has also maintained strong momentum after breaking above USD 30 per ounce in 2024. Mirae’s report noted that silver demand is largely driven by industrial use, which makes up nearly 60% of the total. Its role in semiconductor manufacturing, 5G infrastructure, IoT, and AI data centres is expanding, with growing prospects in AI servers.

“Emerging applications in battery technologies such as silver-zinc and silver-ion, along with energy storage solutions, reinforce long-term demand for silver,” the report added.