Gold jewellery sales set for double-digit growth despite volume dip

NEW DELHI: India's domestic gold jewellery consumption is expected to grow by 12-14 per cent in value during fiscal year 2026, as per an ICRA report. Following a 33 per cent rise in gold prices in FY25, ICRA predicts further price increases in FY26."This will be supported by continued gold price appreciation, planned retail expansion, and market share gains from the unorganised segment. A higher number of auspicious days in the fiscal is also expected to lend some support to demand, despite elevated prices and declining volumes," Senior Vice President and Group Head, ICRA Jitin Makkar said, according to ANI.Gold jewellery consumption saw a sharp 28% rise in value last fiscal year, mainly due to a 33% jump in gold prices.

According to ICRA, a similar trend is expected this year, with gold prices currently about 20% higher than the FY2025 average.However, despite the rise in value, ICRA projects a 9–10% drop in domestic gold jewellery volumes in FY2026, following a 7% decline in FY2025.According to the report, "consumption of bars and coins had risen by 17 per cent and 25 per cent, respectively in FY2024 and FY2025, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions."

The demand for bars and coins is expected to increase by approximately 10 per cent, representing 35 per cent of total gold demand, as per ICRA's analysis.The analysis suggests jewellers' operating margins will increase by about 30 basis points to 7.2 per cent in FY2026, though net margin growth will be restricted due to increased financing expenses."Despite a projected 30 bps expansion in operating margins in FY2026, net margin expansion will remain limited within 10 basis points due to higher financing costs stemming from elevated GML rates and increased working capital borrowings driven by high gold prices and planned store additions," Makkar added.