Gold Demand In India Expected To Weaken This Festive Season As Prices Hit Record Highs
About Kalyan Jewellers & Titan Company Ltd
Kalyan Jewellers India Ltd is one of the leading jewellery retailers in the country with a strong presence in urban as well as semi-urban markets. Its offerings span gold, diamond, platinum, and gemstone jewellery, and it plays a crucial role during the festive and wedding seasons, which are peak demand periods for gold in India.
Titan Company Ltd, part of the Tata Group, has diversified operations in watches, eyewear, and jewellery. Its jewellery division—anchored by the well-known brand Tanishq—dominates the organized retail space. Titan’s performance during festive seasons is seen as a bellwether for consumer demand in the premium jewellery segment.
Festive Gold Demand Faces Pressure
Industry reports suggest that gold demand during India’s crucial festive season may fall short of last year’s levels. Jewellery purchases, which typically account for the bulk of gold demand, are under strain as record-high gold prices make ornaments less affordable for many households. While investment demand in the form of coins, bars, and gold ETFs is witnessing modest gains, it is unlikely to fully offset the decline in jewellery sales.
For context, local gold prices have surged to around ₹1,09,840 per 10 grams in 2025, marking a steep rise from previous years. This surge has been driven by global macroeconomic factors, currency volatility, and strong safe-haven demand worldwide.
Changing Consumer Behaviour During High Prices
Consumers traditionally allocate a fixed budget for gold purchases during festive occasions such as Dussehra, Diwali, and weddings. With prices at record levels, the same budget now fetches fewer grams of gold, leading to lower overall volume demand. Many buyers are shifting to lighter designs, reduced caratage, or smaller-ticket jewellery items. Others are postponing purchases in anticipation of a price correction.
Retailers, in response, are launching promotional offers, discounts on making charges, and flexible payment schemes to retain customers and encourage jewellery buying despite higher bullion costs.
Impact On Kalyan Jewellers & Titan
Kalyan Jewellers, with its wide customer base in tier-2 and tier-3 cities, could be more vulnerable to demand weakness since consumers in these regions are more price-sensitive. Titan, with its premium positioning, may find some cushion as affluent buyers continue to purchase despite high prices, though volumes may still soften.
Both companies are expected to focus on lighter jewellery categories, branded coins, and digital gold platforms to maintain revenue momentum. Analysts believe Titan’s diversified portfolio and brand loyalty could help it navigate the turbulence better than smaller peers, while Kalyan’s deep retail network may provide resilience in semi-urban areas.
Macro Implications For India’s Gold Market
Weaker jewellery demand could impact India’s overall gold imports, reducing the trade deficit marginally. However, the value of imports may still remain high given elevated global prices. For policymakers, reduced volume imports may ease pressure on the current account, though rising prices limit the benefit.
From a cultural perspective, gold buying during festivals is deeply ingrained in Indian households. Even with weaker demand this year, long-term trends remain supportive as gold continues to be viewed as both a store of value and a symbol of prosperity.
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Investment Demand Offers Support
Even as jewellery sales soften, gold’s role as a safe-haven asset is strengthening. Rising inflation, global uncertainties, and currency fluctuations are prompting more investors to allocate funds toward gold as an investment. Coins, bars, and ETFs are gaining traction, which could help balance some of the decline in physical jewellery demand.
For jewellery companies, this shift in preference may encourage them to expand investment-grade offerings, such as branded coins and digital gold products, to capture investor interest.
Investor takeaway
This festive season may not bring the same sparkle for jewellery retailers as in previous years, but the underlying demand for gold in India remains resilient over the long term. For investors tracking Titan and Kalyan, near-term earnings could reflect weaker volume sales, though value growth might remain steady given high prices. The companies that innovate in product offerings and manage costs effectively will likely emerge stronger.
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