How Rising Gold Prices Are Impacting Consumers and the Industry.
Exploring the Ripple Effect of Gold Price Surges on Consumers and the Jewellery Industry. How innovation and strategy are shaping the future of India’s golden market.
Gold. The shimmering metal that has captivated the hearts of millions across generations, cultures, and borders.
In India, gold is more than just a precious metal—it’s a symbol of prosperity, tradition, and wealth. But with the recent surge in gold prices, the industry is facing a crucial turning point, where consumers, retailers, and manufacturers are all feeling the heat.
As gold prices soar to unprecedented levels, how is this dynamic affecting the consumers who adore it, the retailers who depend on it, and the jewellers who craft it? More importantly, what does the future hold for an industry that has weathered many storms—but never quite like this one?
The Shifting Sands of Consumer Behavior
Consumers in India have always viewed gold as an emotional investment—a safety net for uncertain times. However, as prices spiral upwards, there’s a noticeable shift in purchasing habits.
For many middle-class families, the cost of buying gold has become a significant barrier. The larger pieces once favored during weddings and festive seasons are now slipping out of reach for a growing segment of the population.
This has led to an interesting turn: consumers are now leaning toward smaller, lightweight jewellery pieces, balancing the love for gold with price considerations. Simultaneously, there’s an increasing demand for alternative options—lab-grown diamonds, digital gold, and gold ETFs—which offer more affordability without sacrificing quality.
As the price tag on gold increases, so does the desire for smarter, more economical choices. This shift in buying behavior is pushing the industry to rethink its offerings and cater to the evolving demands of a price-sensitive, yet gold-loving, nation.
Retailers: Striking a Balance Between Tradition and Transformation
For retailers, the rising gold prices are nothing short of a double-edged sword. On one hand, the demand for gold remains high—especially during key occasions like Diwali and weddings. On the other, the higher costs are squeezing their profit margins and forcing them to rethink pricing strategies.
Retailers are grappling with how to stay competitive without alienating consumers wary of escalating prices. They’re also facing the challenge of managing their inventory, with higher gold prices cutting into the profits on each item sold.
But here’s the silver lining—retailers who can innovate and offer value-driven experiences are weathering the storm.
There’s a growing trend toward:
- Customizable jewellery
- Lighter-weight, high-quality designs
- Unique pieces that tell a story through craftsmanship, design, or heritage
Smart retailers are capitalizing on this shift by aligning tradition with transformation.
Exclusive Interview with Mr. Rajesh Rokde, Chairman, GJC
In an exclusive interview, we spoke with Mr. Rajesh Rokde, Chairman of the Gem & Jewellery Council of India (GJC), who has been at the forefront of the industry’s efforts to overcome current hurdles.
Key Takeaways:
1. Impact on Retail Jewellery Sales
Despite higher prices, retail jewellery sales remain robust, driven by festive and wedding seasons. Consumers still perceive gold as both valuable and symbolic.
2. Shifting Consumer Preferences
There’s increased interest in lighter jewellery, digital gold, and gold alternatives like silver and gemstones. But traditional gold jewellery continues to dominate special occasions.
3. Challenges for Small and Medium Jewellers
Inventory management and pricing strategy are key hurdles. However, many are adapting through:
- Innovative designs
- Digital platforms
- Improved customer service
4. Regional Trends
- Urban areas: Branded and certified products gaining traction
- Rural areas: Strong preference for traditional gold jewellery
5. Sustainability of Current Price Levels
With global uncertainties and geopolitical tensions, prices are expected to stay high. The industry is preparing by:
- Innovating designs
- Offering competitive pricing
- Using digital marketing
Outlook for Gold and Silver
Both gold and silver are expected to perform well in the coming months, driven by safe-haven demand and industrial use. With the festive season approaching, a surge in demand is anticipated for both metals.
Veteran Insights: Navigating the Gold Price Surge
To gain a broader perspective, we spoke with industry veterans who shared how they’re adapting to changing market dynamics.
Avinash Gupta
Vice Chairman – GJC, Partner at Mamraj Mussadilal Jewellers
“The rising gold prices haven’t diminished India’s unshakable trust in this precious metal. While sales were impacted, consumers are mixing old jewellery with new designs. There’s also growing interest in silver jewellery. Despite market fluctuations, festive demand remains strong.”
Saiyam Mehra
Director, Unique Chains And Jewels Ltd., Past Chairman – GJC
“Consumers now see gold as a secure investment, but they’re cautious—opting for lighter options. Businesses must adapt, innovate, and maintain trust to stay ahead.”
Nilesh Sohanlal Shobhawat
Partner, Rajmudra Jewellers
“Many consumers are holding off purchases or selling old jewellery. We’re focusing on 18kt handmade jewellery and lightweight options to attract budget-conscious buyers.”
Nitin Khandelwal
Khandelwal Jewellers Akola Pvt. Ltd.
“Footfall remains steady, but purchasing behavior has shifted. Buyers prefer lightweight, daily wear jewellery or gold coins. Some are buying now, fearing further price hikes. Demand is stable but more strategic.”
Sachin Jain
Regional CEO, India – World Gold Council
“This is gold’s era. Prices have surged globally, but belief in gold remains strong in India. From gold ETFs to high-carat jewellery, buying continues across formats. Despite tariffs and high prices, retailers are optimistic about festive demand.”
Final Thoughts
India’s relationship with gold remains as strong as ever—evolving, but unbroken. Rising prices are transforming consumer behavior, retail strategies, and product offerings. Yet through innovation, strategic adaptation, and deep cultural ties, the industry continues to shine.
As we head into another festive season, it’s clear that while the form of gold may change, its value—emotional, financial, and cultural—remains timeless.
