Gold prices falling from their record highs has led to Indian consumers increasing their purchases of precious metals during the Dhanteras-Diwali period. Gold demand rose 30% in volume terms and silver buying grew 10% compared with the corresponding period last year, according to the India Bullion and Jewellers Association (IBJA). Jewellers said the trend pointed to a recovery in demand ahead of the important wedding season.The industry body estimated that consumers purchased 52 tonnes of gold worth Rs 72,000 crore and 300 tonnes of silver valued at Rs 5,400 crore during this year’s Dhanteras and Diwali celebrations.
Gold price correction from Rs 1.8 lakh peak
The increase followed a correction in gold prices from a peak of around Rs 1.8 lakh to Rs 1.42 lakh per 10 grams, drawing buyers back into the market. Purchases made in advance of the wedding season, which starts in mid-November and runs until March, also helped boost demand.“Jewellers have made good business in this year’s Dhanteras and Diwali,” IBJA national secretary Surendra Mehta told ET.Mehta said the market was witnessing pent-up demand, as several consumers had put off buying gold after Prime Minister Narendra Modi appealed to people not to purchase the metal.“Consumers had stayed away from the precious metal. But since the price has fallen and there is a chance of prices moving northwards again as Brent crude prices have fallen, people have come out to buy gold. In fact, buying is still continuing .”The festival calendar also worked in favour of jewellery purchases. Dhanteras was observed on November 6, followed by Diwali on November 8. Both occasions fell in the early part of the month, when salaried employees typically receive their monthly pay and festive bonuses.“This has resulted in healthy cash flow in the market, encouraging consumers to shop enthusiastically. Gold prices have also been relatively lower over the past four to six months, further improving purchasing sentiment,” said Rajesh Rokde, chairman of the All India Gem & Jewellery Domestic Council.In the current fiscal year through September, gold sales by volume declined by nearly 50%. The fall was attributed to higher prices, an increase in import duty and Prime Minister Narendra Modi’s appeal to consumers to refrain from buying gold.
Gold generates big returns
Despite the volatility, gold has generated significant returns over the past few years. Prices, which were around Rs 60,000 per 10 grams in 2023, climbed to Rs 80,000 in 2024 and reached Rs 1.15 lakh-Rs 1.20 lakh in 2025. During this year’s Dhanteras-Diwali period, prices stood at approximately Rs 1.42 lakh per 10 grams. Silver has also recorded a substantial appreciation in value.An analysis of eight years of business performance by Bengaluru-based C Krishniah Chetty Jewellers found that gold sales volumes during this festive season were the third-highest in a decade, even though prices were around 10% above their level a year earlier.“The overall sentiment has remained unshaken, with consumers continuing to repose confidence in gold jewellery despite the unprecedented rise in prices over a 12-month period,” said C Vinod Hayagriv, director of C Krishniah Chetty Jewellers.Natural diamonds also held up well, registering their second-highest sales volume in eight years. The retailer recorded a 250% increase in natural diamond sales on Dhanteras, while sales during the Diwali season rose 47%.The performance comes at a time when the natural diamond industry is facing disruption from global sanctions affecting Russian diamond supplies and increasing competition from lab-grown alternatives. However, lab-grown diamonds are emerging as an additional product category rather than displacing natural diamonds.
