India's Diwali Gold Rush: A Shift Towards Investment and Lighter Jewellery

Sat Oct 18 2025 23:59:25 GMT+0300 (Eastern European Summer Time)

As Diwali approaches, the Indian gold market experiences a shift driven by soaring prices. Consumers are buying less jewellery, focusing more on investment and lighter pieces, while the festive spirit remains intact.

The gold market in India is bustling as Diwali nears, but rising prices have changed buying patterns. Shoppers are opting for investment-grade gold and lightweight jewellery. Despite the high prices, cultural traditions keep the demand strong, though some buyers feel the pinch financially.

Ahead of the Hindu festival of Diwali, the jewellery market in Delhi's vibrant Lajpat Nagar neighbourhood is teeming with crowds.

Shops have stayed open even on holidays, and at dusk, dozens of cars line up the streets as a string of flashy signboards beckon shoppers into the flower-adorned stores.

Soaring gold prices - which have topped $1,440 (£1,081) for 10g - may have slightly dented demand for jewellery in the world's second largest market for gold, but Indians are not willing to give up on their gold purchasing completely.

Diwali, along with Dhanteras, an auspicious occasion for buying precious metal, sees hundreds of thousands flocking to the markets for gold and silver coins, bars, and jewellery, believed to bring wealth and luck.

Despite the high prices causing some strain, the 'fear of missing out' is prompting a surge in buyers at stores. Prakash Pahlajani of Kumar Jewels reported an increase in customers despite the economic strain.

However, due to the higher costs, jewellers have tailored their inventory to match customer budget realities, introducing lighter jewellery options to accommodate shifting consumer preferences.

Another notable trend this year is the increased focus on buying gold as an investment rather than for adornment, indicating a significant transition, supported by market data.

While traditional jewellery remains popular, the World Gold Council noted a decline in jewellery's market share compared to the growing investment demand, driven by factors like exchange-traded funds, which saw record inflows recently.

Experts predict sustained demand through the festive season, particularly among affluent consumers, while acknowledging that lower-income families may struggle.

The strong cultural inclination towards gold ensures its long-term allure, with many viewing it as a stable investment in economically volatile times. Indian households hold a staggering $3.8 trillion in gold, highlighting its significance in personal wealth and investment strategy.

Although high prices might deter some potential buyers, the underlying demand for gold remains robust, particularly as families prepare for festive and wedding seasons.