According to the ‘India Focus’ report released by the World Gold Council (WGC) on Tuesday, the largest source of gold investment in India in the September quarter was ‘bars and coins’ (gold bars and coins). Their demand rose 9% to 55 tonnes compared to the previous quarter, although it was down 40% compared to the same period last year. On the one hand, this decline was seen due to last year’s high base, on the other hand, investor buying also slowed down due to the slow pace of price growth.
A 9 percent increase in import duty on gold in May also affected demand. According to the WGC, their economic models show that changes in import tariffs and incomes have a significant impact on the demand for ‘bars and coins’. The association said increasing fees and imposing restrictions generally lead to reduced demand. According to the report, despite a year-on-year decline, India remains the world’s second largest market for ‘bars and coins’ after China. India accounted for around 21 percent of global demand in the September quarter.
Investment demand
The WGC said total investment demand for gold in the September quarter rose 12 percent to nearly 60 tonnes from the previous quarter. However, due to the slow pace of price increases, it remained slightly below the high levels of the second half of 2025 and the first quarter of 2026.
The strong inclination towards investment that was seen in the March quarter – when investment demand even outstripped jewelery demand – has now moderated. Investment accounted for about 42% of India’s total gold demand in the September quarter, up from 69% in the March quarter.
Despite this, investment demand remained largely robust. In the first nine months of 2026, it fell by just 4% compared to last year, while the same period saw an 18% drop in demand for jewellery. According to the report, this indicates that higher gold prices have had little impact on investment purchases.
Gold ETF
Gold exchange-traded funds (ETFs) continued to attract investor attention. Demand rose to 5.3 tonnes from 3.6 tonnes in the September quarter, taking total holdings to around 124 tonnes, according to WGC.
In mid-October, mutual fund houses temporarily halted new subscriptions to ‘gold funds of funds’ (FoFs), while allowing direct investment in existing systematic investment plans (SIPs) and gold ETFs to continue.
The WGC says this development needs to be monitored, as assets under FoF (AUM) are equal to about a third of gold ETF assets. However, existing FoF SIPs and direct ETF investments may continue, so the impact on total ETF inflows is expected to be limited.
Digital gold has grown in popularity
Investment in gold is now proceeding through traditional methods. Total purchases of digital gold in the September quarter were around 4.9 tonnes. This is almost stable compared to the previous quarter, but higher than the figure of 3.4 tonnes a year ago.
Demand for digital gold rose 76 percent to 16.3 tonnes in the first 9 months of 2026, from 9.2 tonnes in the same period last year. According to the WGC, this growth is due to the easy availability and convenience of digital gold and the minimum investment required.
