Gold Prices Cool After Record Rally, GJC Predicts Festive Demand Boost

MUMBAI : After witnessing an unprecedented rally that pushed gold and silver to all-time highs earlier this year, India’s bullion market is entering a phase of correction rather than collapse. While easing prices have offered some relief to buyers, the Gem & Jewellery Domestic Council (GJC) says taxation, geopolitical tensions and policy reforms will continue to shape the industry’s trajectory in the second half of 2026.

In its half-yearly review, GJC noted that gold touched a historic peak of ₹1,70,480 per 10 grams in January before correcting to around ₹1,42,800 by the end of June. Silver also surged past the ₹4 lakh per kilogram mark for the first time, reaching ₹4,02,490, before retreating to nearly ₹2.26 lakh per kilogram.

The sharp fluctuations fuelled investor interest in gold as a safe-haven asset but dampened jewellery demand as affordability became a challenge. Consumers increasingly shifted towards lightweight jewellery, reflecting changing buying patterns and tighter budgets.

“The recent correction reflects a natural adjustment after extraordinary highs, not a market collapse,” said GJC Chairman Rajesh Rokde. “Retail gold prices have remained elevated despite softer futures, showing the resilience of the domestic market. We expect the festive season and the upcoming wedding calendar to revive jewellery demand, especially in lightweight designs.”

The Council also highlighted the impact of higher customs duty, GST compliance and geopolitical tensions in the Middle East, which contributed to price volatility. A weaker Indian rupee against the US dollar and continued central bank purchases of gold further supported bullion prices during the first half of the year.

GJC Vice Chairman Avinash Gupta urged policymakers to strike a balance between revenue collection and industry growth. “Excessive customs duties can encourage unofficial trade channels, hurting both consumers and legitimate businesses. Reforms to the Gold Monetisation Scheme can unlock idle household gold, reduce import dependence and strengthen India’s economic resilience,” he said.