Large Indian jewellers are holding back gold purchases ahead of the busiest buying season, betting that the recent fall in prices has further to run, says MMTC-PAMP, India's biggest precious metals refiner. Citi Research expects fourth-quarter imports at about half the usual level.
At a glance
- Buying has been led by small and mid-sized jewellers, while big chains have not fully returned.
- Citi Research sees October-December gold imports of about 106 tonnes, against a historical average of 212 tonnes.
- India more than doubled its gold import duty to 15% in May.
Background
India is the world's second-biggest gold consumer and imports nearly all the gold it uses. Demand usually peaks between October and December around Diwali, which falls on November 8 this year. Gold fell below $4,000 an ounce last week for the first time since July, about 24% below where it stood when the US-Iran war began in late February.
What happened
Large jewellery chains that usually account for most gold sales have not fully returned to the market, said Samit Guha, chief executive of MMTC-PAMP India, Bloomberg reported. MMTC-PAMP is a joint venture of state-owned MMTC and Swiss refiner PAMP. Buying has been led instead by small and mid-sized jewellers, some of which have placed repeat orders.
Big jewellers usually buy more when prices start rising, to lock in supply, and draw down their stocks when they expect prices to fall, Guha said.
Why demand is weak
Demand has been subdued this year after the government more than doubled the import duty to 15% in May. Prime Minister Narendra Modi has also urged Indians to buy less gold to contain a widening trade deficit. The higher duty has also pushed more buying into informal cash markets.
Citi Research expects tighter import rules and weaker rural demand to curb imports, after El Niño disrupted the monsoon. It sees shipments of about 106 tonnes from October to December, roughly half the fourth-quarter average of 212 tonnes.
What it means
MMTC-PAMP's sales are running below last year, with demand tilted towards smaller coins and bars. September sales were roughly flat from a year earlier, and buying has picked up slightly in October. "If gold rebounds, we will see buying," Guha said.
Our read
Outlook: bearish. Weak buying from India, the second-biggest consumer, removes support for gold during its usual peak season.
What to watch
- Jewellers' buying in the weeks before Diwali on November 8.
- India's October gold import figures.
- Whether a rebound in gold prices brings big jewellers back.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-11-08: Diwali, the peak of India's gold-buying season.
Government Policies
A 15% import duty and official calls to buy less gold are weighing on demand.
What could lift prices
- Big jewellers usually buy quickly once prices start rising.
- Small and mid-sized jewellers are already placing repeat orders.
What could weigh on prices
- Citi expects India's fourth-quarter imports at about half the usual level.
- The 15% import duty is pushing demand into informal markets.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | Jewellers are delaying gold purchases ahead of the peak buying season. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Negative | Weak demand and a high import duty are hurting jewellery sales. |
Who gains, who loses
- Small and mid-sized jewellers: They are buying at lower prices while big chains wait.
- Gold refiners and importers in India: MMTC-PAMP's sales are running below last year's levels.
Other ways this could play out
- If gold rebounds, big jewellers could return quickly before Diwali.
- If prices keep falling, India's fourth-quarter imports could stay near Citi's estimate of 106 tonnes.
Price risks
- A sudden price rise could force jewellers to buy at higher prices.
- A cut in the import duty would change buying patterns quickly.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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