IFTA 2026: India has voted. See the winners.

Indians bought far less gold between July and September, when prices averaged ₹1,48,891 per 10 grams. In the same months, they borrowed much more against the gold they already own. Two data releases from the past week, one from the World Gold Council and one from the Reserve Bank of India, show the same metal being used in two very different ways.

Gold necklaces and bangles displayed in a jewellery shop showcase

Two numbers, one metal

The World Gold Council’s India report for July–September 2026, published on 3 November, puts total demand at 162.5 tonnes. That is 29 per cent lower than a year earlier by weight. By value, demand rose 3 per cent to about ₹2.42 lakh crore, because each gram cost so much more.

Jewellery demand fell 20 per cent to 99.9 tonnes, even as spending on jewellery rose 16 per cent to about ₹1.49 lakh crore. Bars and coins, the investment side of the market, fell harder: down 40 per cent to 55 tonnes.

Four days earlier, on 30 October, the RBI’s sectoral credit data for September showed loans against gold jewellery at ₹5.6 lakh crore, up 83 per cent from a year earlier, according to Business Standard and Free Press Journal reports of the release. Personal loans as a whole grew 17.3 per cent to ₹74.27 lakh crore.

Why people bought less

The obvious reason is price. The council’s figures show the average Indian price in the quarter was ₹1,48,891 per 10 grams on the MCX spot average, 45 per cent higher than a year earlier. Prices did ease about 1 per cent from the April–June quarter, and the council says softer prices late in the quarter, along with seasonal buying, helped jewellery demand recover 33 per cent from the previous quarter.

The council links the fall in bar and coin buying to a very high base last year and to slowing price momentum. Imports also changed shape after the import duty went up to 15 per cent in May. Official bullion imports fell 70 per cent to 64 tonnes, while the council estimates unofficial inflows rose to about 50 tonnes, from 3 tonnes a year earlier.

Why borrowing rose

A gold loan is sized against the value of the jewellery pledged. When the price of gold goes up 45 per cent, the same necklace or set of bangles can support a much larger loan, without the borrower buying a single extra gram.

The rules also changed. Under RBI directions issued in June 2025, which lenders had to follow by 1 April 2026, loans of up to ₹2.5 lakh can be given for up to 85 per cent of the gold’s value, up from 75 per cent earlier. The limit is 80 per cent for loans between ₹2.5 lakh and ₹5 lakh, and 75 per cent above that. Loans up to ₹2.5 lakh backed by gold do not need a credit appraisal, as Onmanorama reported when the rules were announced.

There is also a sign that families would rather pledge gold than sell it. Recycled gold, meaning old jewellery sold or exchanged for melting, fell 12 per cent to 19 tonnes in the quarter. The council says this suggests holders are reluctant to sell.

What the RBI data does not show

The RBI figures come from 41 scheduled commercial banks that together account for about 95 per cent of bank non-food credit. They do not cover loans made directly by gold-loan companies and other non-bank lenders, so the total amount borrowed against gold in India is larger than ₹5.6 lakh crore.

The data also does not say what the money was used for. A gold loan can fund a small business, a medical bill, school fees or a wedding, and the release does not break this down. The RBI’s own description is measured: growth in loans against gold jewellery “decelerated compared to last year, albeit it remained strong.”

For borrowers, the basic trade-off has not changed. The loan is secured by the jewellery itself. A higher gold price makes more credit available, but if prices fall, the same gold covers less of the loan, and if a loan is not repaid, the lender can sell the pledged gold.

What to watch

The council expects festive and wedding demand to support buying in October–December, while warning that high prices and a weak rural economy after a poor monsoon may hold it back. The RBI’s next monthly credit release will show whether gold-backed borrowing kept rising through the festive season, or whether the 83 per cent pace has started to cool.