Rising bullion prices haven’t translated into a significant increase in old gold sales, and festive demand has also shown limited momentum.
Gold prices have climbed sharply in August in India, but the rise hasn’t led to a corresponding increase in old gold sales at retail counters, according to the India Bullion and Jewellers Association (IBJA). Surendra Mehta, Secretary of the IBJA, said old gold sales in August were only marginally higher than the previous month. Festive demand also remained subdued around RakshaBandhan, suggesting that consumers are still cautious despite elevated gold prices.
The trend is notable because higher gold prices can typically encourage households to sell old jewellery and realize gains. This time, however, the response has been relatively restrained.
Gold prices remain near recent highs.
International gold prices have remained elevated after gaining more than 5% last week. Gold was trading around $4,633 an ounce at the August 24 PM fixing, after recently reaching its highest level in more than three months.
The rally has been supported by several global factors, including concerns surrounding US fiscal sustainability, movements in the Treasury market and a weaker US dollar. These developments have helped maintain demand for gold as a perceived safe-haven asset. Domestic prices have also remained high. Earlier in August, Indian gold prices had already risen substantially following a recovery from the sharp correction seen in June.
Consumers remain cautious.
The limited rise in old gold sales points to a more cautious consumer response to higher prices. Rather than selling jewellery immediately, some households may be choosing to hold their gold amid expectations that prices could remain elevated.
Recent data also shows that gold recycling in India has not consistently risen alongside prices. World Gold Council data cited by Moneycontrol showed that net gold recycling fell to 19 tonnes in the April-June quarter, its lowest level in nearly three years. Another factor is the distinction between selling gold for cash and exchanging old jewellery for new pieces. Consumers may opt for exchanges instead of outright sales, particularly ahead of the festive and wedding seasons.
While higher prices have supported the value of India’s gold market, they could challenge physical jewellery demand if the rally continues. India’s gold demand fell 6% by volume in the second quarter of 2026, even though spending rose 50% to a record ₹1.98 lakh crore because of higher prices.
The August trend therefore presents a mixed picture: gold prices remain strong, but consumers are not responding with a proportionate increase in old gold sales or festive purchases.
