CareEdge Ratings: Investment Share In India’s Gold Consumption Rises To 42% In CY25
FinTech BizNews Service
Mumbai, April 27, 2026: According to CareEdge Ratings, investment share in India’s gold consumption rises to 42% in CY25 from 29% in CY24. Investment demand surged to record levels globally and in India led by gold ETFs and bar-and-coin buying, reflecting safe-haven demand, diversification motives and geopolitical uncertainty.
CareEdge Ratings highlights that globally the annual investment demand at 2,175 MT in CY25 smashed the previous record of 1,805 MT in CY20 led by ETF investment which contributed over 800 MT with factors including diversification considerations, elevated geopolitical risks and safe-haven demand supporting demand. The trend is also evident in India with strong ETF investments by Indians in the last two years, adding 37.5 tonnes in CY25, more than the combined investment in last 10 years.
Global gold demand reached an all-time high in CY25, rising ~8% y-o-y to ~5,000 metric tonnes (MT), driven primarily by robust investment demand despite sharply higher gold prices and macroeconomic headwinds. Central banks continued large-scale gold accumulation for the fourth consecutive year, underscoring gold’s role in reserve diversification amid geopolitical challenges.
While Global gold ETF holdings grew 801 MT, second highest on record, bar and coin buying accelerated to reach a 12-year high driven by safe-haven and diversification motives. However, composition of gold consumption globally has undergone a structural shift with the share of jewellery falling by ~19% y-o-y to 33% in CY25, much below the 15-year average of ~50% – as consumers responded to elevated prices by reducing discretionary jewellery purchases. The trend is visible in Indian market as well where the share of jewellery consumption fell below 60% of total gold purchases in CY25 compared to long-term average of ~70%.
Speaking on Gold consumption patterns of Indian investors, Akhil Goyal, Director, CareEdge Ratings said, “Gold consumption patterns are witnessing a structural shift, with jewellery accounting for less than 60% of India’s total gold purchases in CY25, compared to a long term average of ~70%. Geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue fuelling investment demand for gold, with its share in overall gold consumption is projected at 35-40% in FY27.”
Gold prices have entered a more durable high-price regime supported not by short-term speculative flows but by structural demand shifts, sustained official sector buying and persistent global macroeconomic and geopolitical uncertainty.
Strong spending on jewellery by Indians despite record prices to aid branded jewellers’ fortunes
CareEdge Ratings notes that Indian jewellery demand remains resilient despite record gold prices with jewellery purchases rising ~10% y-o-y to Rs4.8 lakh crore in CY25, reflecting consumers’ willingness to allocate higher wallet share to jewellery. Indians’ total spending on jewellery purchases has grown at a healthy compounded annual growth rate (CAGR) of 11% over CY21-CY25 indicating continued appetite for the yellow metal. Though on value basis demand remained resilient, volume has declined by 15% in CY25, which is reflective of the price-sensitive nature of jewellery demand, where preferences shifted towards lower-carat/lighter-weight jewellery.
CareEdge Ratings’ sample of six large, listed jewellers is expected to report stellar revenue growth of ~35% y-o-y in FY26 and 20-25% y-o-y in FY27 led by continued store additions, market share gains from accelerated formalisation of the sector and steady consumer appetite for gold despite the sustained price rise. Average gross profit margin of CareEdge Ratings’ sample of jewellers is projected to increase by 170-200 bps in FY26 led by inventory gains on unhedged gold. Profitability is likely to normalise in FY27 with projected gross profit margin in the range of 14-14.5% on the expectations of range-bound gold prices and profit before interest, lease rentals, depreciation and taxation (PBILDT) margin in the range of 6.5-7% due to front-loaded operating expenses on new stores.
It notes that retailers have continued their trend of healthy new store addition in FY26 to expand their retail presence in existing and new geographies with the cohort estimated to have added 310 stores in the year, the second consecutive year of 300+ new store additions. This represents the sector’s continued formalization amid shifting consumer preferences towards branded jewellers, supported by regulatory interventions in recent years. However, new store addition as a percentage of existing stores halved to 11% in FY26 from 20%+ over the previous three years, partly attributable to a growing base, indicating cautious optimism towards expansion. Expansion of retail footprint through the franchisee route remains the preferred mode, considering its benefits in terms of lower incremental inventory funding requirements. The share of franchisee stores in overall retail presence of CareEdge Ratings’ sample of jewellers is estimated to increase to 62% in FY26 from less than 60% in FY23.
Raunak Modi, Assistant Director, CareEdge Ratings said, “Domestic organised jewellery retailers are expected to report revenue growth of over 35% year‑on‑year in FY26, driven by steady consumer appetite for jewellery despite rising gold prices, market‑share gains from accelerated sector formalisation and planned store additions. This momentum is likely to continue in FY27, with revenue growth projected at 20–25% year‑on‑year. Operating profit margin is also likely to expand by 180-200 bps in FY26 supported by inventory gains, which is likely to normalise to 6.5-7% in FY27 led by expectations of range-bound gold prices and front-loaded operating expenses on new stores.”
