New Delhi, April 27 (IANS) Investment share in India’s gold consumption rose to 42 per cent in CY25 from 29 per cent in CY24 as investment demand surged, led by gold ETFs and bar-and-coin buying, reflecting safe-haven demand, diversification motives and geopolitical uncertainty, a report showed on Monday.

Global gold demand reached a record in CY25, up 8 per cent YoY to roughly 5,000 metric tonnes (MT), driven primarily by robust investment demand despite sharply higher gold prices and macroeconomic headwinds, the report from CareEdge Ratings said.

“Geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue fuelling investment demand for gold, with its share in overall gold consumption projected at 35-40 per cent in FY27,” said Akhil Goyal, Director, CareEdge.

The ratings agency noted that Indian jewellery demand remains resilient despite record gold prices with jewellery purchases rising roughly 10 per cent YoY to Rs 4.8 lakh crore in CY25. Indians’ total spending on jewellery purchases has grown at a healthy compounded annual growth rate (CAGR) of 11 per cent over CY21-CY25.

It forecasted listed jewellers to see 35 per cent YoY revenue growth in FY26 and 20-25 per cent in FY27 led by continued store additions, market share gains from accelerated formalisation of the sector.

Average gross profit margin is projected to increase by 170-200 bps in FY26 led by inventory gains on unhedged gold.

The ratings agency highlighted that annual global investment demand at 2,175 metric tonnes (MT) in CY25 smashed the previous record of 1,805 MT in CY20 led by ETF investment at 800 MT.

Asset diversification due to elevated geopolitical risks and safe-haven demand drove the demand. India also showed a similar trend with strong ETF investments in the last two years, adding 37.5 tonnes in CY25, higher than the combined investment in the last 10 years.

Central banks continued large-scale gold accumulation for the fourth consecutive year, underscoring gold’s role in reserve diversification amid geopolitical challenges.

Global gold consumption saw a structural shift with the share of jewellery down roughly 19 per cent YoY to 33 per cent in CY25, much below the 15-year average. Share of jewellery consumption in the Indian market fell below 60 per cent of total gold purchases in CY25 compared to long-term average of roughly 70 per cent.

—IANS

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