India's Gold Sparkles Again: Stable Prices Fuel Festive Demand Surge

India love affair with gold is heating up again, with jewellery demand making a significant comeback as prices settle down and the festive season approaches. After a period of subdued buying, the World Gold Council (WGC) reports a clear recovery, driven by consumers flocking back to stores, keen to take advantage of stable rates and attractive retailer discounts. This signals a shift in consumer sentiment, moving away from the caution seen earlier in the year. This recovery is happening despite a mixed picture in the broader gold market, where investment in gold bars and coins has softened. However, Gold Exchange Traded Funds (ETFs) and digital gold purchases have seen a healthy rebound, showing a diversified interest in the yellow metal. Crucially, the trend of exchanging old gold for new purchases has intensified, partly fueled by the Indian government's import duty hike in May 2026, which saw duties jump from 6% to 15%. This move has not only helped manage fresh imports but also allowed consumers to leverage their existing gold holdings. Looking ahead, major Indian festivals like Ganesh Chaturthi, Navratri, and Diwali, set for the latter half of 2026, are expected to further boost jewellery sales, acting as key demand drivers. While global gold prices remain somewhat volatile and are expected to stay range-bound, India domestic market dynamics, including a weaker Indian Rupee and robust consumer spending, are creating a unique sweet spot for gold, especially for jewellery.