CareEdge Ratings noted that the trend is not limited to India. Globally, gold investment demand surged to a record 2,175 metric tonnes (MT) in CY25, surpassing the previous high of 1,805 MT seen in CY20. Exchange-traded funds contributed over 800 MT of this demand, while bar and coin buying also rose sharply, reaching a 12-year high.
In India, ETF inflows remained particularly strong during CY25, with 37.5 tonnes added in the year alone—exceeding the cumulative inflows recorded over the previous 10 years combined, the report said.
Overall global gold demand rose around 8% year-on-year in CY25 to nearly 5,000 MT, marking an all-time high. However, the composition of demand continued to shift. Jewellery’s share globally declined to 33% in CY25 from around 50% on a long-term average basis, as higher prices weighed on discretionary purchases.
A similar trend was seen in India. Jewellery accounted for less than 60% of total gold purchases in CY25, compared with a long-term average of about 70%, indicating a gradual shift away from traditional consumption towards investment-oriented buying.
Commenting on the trend, Akhil Goyal, Director at CareEdge Ratings, said gold consumption patterns are undergoing a structural change, with investment demand gaining prominence amid geopolitical uncertainty, sustained price momentum, and diversification strategies. He added that the investment share in overall gold consumption is expected to remain elevated at 35–40% by FY27.
CareEdge Ratings said gold prices have entered a structurally higher range, supported by sustained central bank purchases, macroeconomic uncertainty, and changing investor behaviour, rather than short-term speculative flows.
Despite record prices, India’s jewellery demand remained resilient in value terms during CY25. Jewellery purchases rose about 10% year-on-year to ₹4.8 lakh crore, reflecting higher spending per transaction. However, volumes declined around 15%, indicating a shift towards lighter-weight and lower-carat jewellery.
On the organised retail side, CareEdge Ratings said a sample of six large listed jewellery companies is expected to report strong growth in CY25 and FY26. The cohort is projected to post revenue growth of around 35% year-on-year in FY26 and 20–25% in FY27, supported by store expansion, increasing formalisation of the sector, and steady consumer demand.
Retail expansion remained active in FY26, with around 310 new stores added across the sample set. However, the pace of expansion moderated, with new store additions falling to about 11% of existing stores in FY26, compared with over 20% in previous years. Franchise-led expansion continued to dominate, with the share of franchise stores rising to 62% in FY26 from below 60% in CY23.
CareEdge Ratings also noted that profitability is expected to improve in FY26 due to inventory gains on unhedged gold, before normalising in FY27 as margins stabilise alongside range-bound gold prices and higher operating costs linked to store expansion.
Raunak Modi, Assistant Director at CareEdge Ratings, said organised jewellery retailers are likely to benefit from sustained consumer demand despite elevated gold prices, alongside continued formalisation and market share gains. He added that while near-term margins may improve, profitability is expected to settle at more stable levels as expansion costs increase.