Soaring prices reshaped buying patterns during Dhanteras, the auspicious start of Diwali gold purchases in India. Industry officials said customers prioritised coins and bars over jewellery, betting the rally has further to run even as budgets were stretched.
Headline shifts in demand
- Volumes down, value up: Overall gold sales by volume fell an estimated 10–15% year on year, but the total value of purchases jumped because of higher prices, according to the All India Gem and Jewellery Domestic Council.
- Jewellery hit hardest: Retailers reported ~30% year-on-year declines in jewellery demand, while coins and bars sold briskly, per the India Bullion and Jewellers Association.
- Why coins/bars? Buyers avoid 10–20% manufacturing charges embedded in jewellery, making coins and bars the more cost-efficient way to gain exposure when prices are at records.
Prices, records and premiums
- Domestic prices: Local gold closed around ₹127,008 per 10g, after setting a record near ₹132,294, putting prices more than 60% above last Dhanteras.
- Dealer premiums: Tight supply and festive demand pushed Indian dealer premiums up to about $25/oz over official domestic prices (which include 6% import and 3% sales levies)—reported as the highest in more than a decade.
- Market backdrop: Over the same period, India’s NSE Nifty 50 gained roughly 5%, but the outperformance of gold kept capital flowing toward the metal.
Retail tactics: keep the momentum, soften the sticker shock
To sustain festive and wedding-season interest, retailers leaned on promotions and lower making charges. The World Gold Council’s India unit noted that “healthy” discounts on making charges are being used to offset price shock and keep the footfall converting.
Silver shines too—and ETFs see inflows
- Silver demand: Retailers cited strong demand for silver coins, bars and jewellery, with some investors wagering that silver could outperform gold from here.
- ETFs & physically backed funds: The search for precious-metal beta extended beyond stores: physically backed gold and silver ETFs have attracted robust inflows in recent months as investors diversify and systematise exposure.
What shoppers were buying (and why)
- Coins & Bars: Lowest friction to own gold at record prices; easy to store, sell and gift.
- Lighter Jewellery: Where jewellery sold, shoppers often chose lighter weights or lower making charges to stay within budget.
- Silver: A cost-effective festive gift that also offers catch-up potential if the gold/silver ratio narrows.
What it means for the season ahead
- Festive carryover: With many stores open late into the night and Dhanteras purchasing spilling into the following afternoon, trade bodies expect momentum to carry into the rest of Diwali week.
- Wedding demand: Elevated prices may cap weight per ticket, but value per ticket could remain high if price strength persists.
- Inventory strategy: Retailers are likely to prioritise investment products (coins/bars) and lightweight designs, while keeping promotions calibrated to price volatility.
Quick data recap
- Volume: Dhanteras gold purchases –10% to –15% YoY
- Jewellery: ~–30% YoY
- Price: ₹127,008/10g close; ₹132,294/10g record; >+60% YoY
- Premium: Up to $25/oz over official domestic prices
- Equities: Nifty 50 ~+5% over the same period
- Costs: Jewellery making charges 10–20% of gold price
Bottom line
Dhanteras 2025 demonstrated a clear flight to investment-grade formats as households navigated record prices: coins and bars outpaced jewellery, silver gathered strength, and ETFs absorbed fresh inflows. Unless price pressure eases, India’s festive-to-wedding season looks set to remain value-heavy, weight-light, with retailers using discounted making charges and inventory mix to keep demand resilient.
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