The gold prices have been hiking massively and the sky high-rates have weighed down the sales even in festive season of Rakshabandhan and Onam which usually see the purchase of precious metal surge.
Gold prices have jumped to new highs in 2025, breaching the ₹1.10 lakh mark for a 10 gram of gold credits to the market uncertainty globally, a falling rupee against USD, and speculations of inflation. It has affected both the investors-community and the general public retail customers. This rise in price is dragging gold sales even during peak-demand festive periods such as Rakshabandhan and Onam, when gold purchase generally sees its peak.
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The initial phase of the festive season from Rakshabandhan to Onam has witnessed gold demand falling more than 25% year-on-year, as per the India Bullion & Jewellers Association (IBJA). Customers are either cutting down or going for lighter and lower carat jewellery to suit shrinking budgets. Jewellery sales have declined though, while investment demand in gold coins, bars, and ETFs is steady due to gold still being considered a safe-haven asset amid uncertain times.
Jewellers are concerned that high gold prices have cooled down consumers' enthusiasm. Festivals such as Rakshabandhan and Onam are usually peak seasons to buy gold as presents and for auspicious events. Yet, prices around ₹1 lakh, 10 thousands for 10 grams have pushed many consumers to postpone purchases or opt for exchanging old gold for new designs instead of purchasing fresh. Others are holding back with hopes of falling prices after the festival season.
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A variety of forces are propelling the gold price movement. On the international front, prices have gone up on the back of geopolitical tensions, inflationary hopes, and expected US Federal Reserve rate cuts. On the domestic front, a falling Indian rupee against the American currency contributes to domestic pressure. Enduring trade uncertainties and robust demand from central banks and big investors across the globe underpin gold's upward path.
In spite of adversity, gold is still culturally important and holds faith in India. Jewellers are coping by providing cheaper alternatives- 18-carat, 14-carat, and silver ornaments to maintain the sales floating during the crucial festive season.
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Summing up, the record-high gold prices in 2025 have dragged down the sales during Rakshabandhan and Onam festivals. Though demand for heavyweight traditional jewellery has subsided, investment buying and value alternatives support the market. The next few months would be critical to check if the rally will ease or continue, affecting wedding buyer sentiment and Diwali.
