A government source said on Monday that India has no plans to raise import duties on gold and silver. The clarification came a day after comments from Prime Minister Narendra Modi urging people to avoid buying gold for a year due to economic pressure linked to the Iran conflict.
India is the world’s second-largest consumer of gold and the largest consumer of silver. Therefore, any change in policy often attracts strong market attention.
Investment demand overtakes jewellery for the first time
Earlier data from the World Gold Council (WGC) shows a major shift in buying patterns. Investment demand for gold in India has now surpassed jewellery demand for the first time on record.
Sachin Jain, chief executive of WGC India, said investors are turning to gold because equity markets have delivered weaker returns.
He added that investment interest is likely to grow further in the coming quarters. Both retail and financial investors are showing stronger participation.
Strong rise in investment buying
Investment demand rose sharply during the March quarter. It increased by 52% year-on-year to 82 metric tons.
At the same time, jewellery demand fell by 19.5% to 66 tons. High prices reduced consumer buying for ornaments.
As a result, overall gold demand still increased. Total consumption rose 10.2% to 151 metric tons.
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Investment now leads total demand
For the first time, investment accounted for the largest share of total gold consumption. It reached 54.3% of the market in the March quarter.
This shift highlights a clear change in consumer behavior. Investors now treat gold more as a financial asset than a traditional jewellery purchase.
Outlook
The World Gold Council expects investment demand to stay strong. It believes economic uncertainty and market volatility will continue to support gold buying in India.
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