Goldman Sachs sees gold rally pausing, not peaking, as India jewellery demand weakens
Goldman Sachs identifies $4,000/oz as a preferred accumulation level and expects sustained central-bank buying to support gold. The outlook signals continued input-cost pressure for Indian jewellers, where physical demand has softened amid high prices, energy costs and currency-defence measures.
What happened
Goldman Sachs says gold’s rally is paused rather than over, supported by elevated central-bank buying. It flags weakened Indian physical demand amid energy
Key facts
- Gold preferred accumulation level: $4,000/oz
- Spot gold: $4,342.20/oz, down 2.4% on September 1
- Global annual mine output: roughly 3,500 tonnes
- Central-bank purchases pre-2022: 400-500 tonnes annually
- Current central-bank purchases: 1,000-1,100 tonnes annually
- Central banks bought 863 tonnes in 2025
- Estimated net central-bank demand in H1 2026: 345 tonnes
- Silver price scenarios: $50, $80 or $100/oz
Why this matters
Prioritize targets or partnerships that add lightweight designs, recycling, digital gold or hedging capabilities, which can help offset demand sensitivity to persistently high bullion prices.
What to watch
- Gold price in INR per 10 grams, rather than USD gold alone, including rupee depreciation effects.
- Indian jewellery retail volume growth, footfall, average ticket size and grams sold per transaction.
- Wedding-season and festival booking trends, especially advance purchase and exchange-program participation.
- Central-bank gold purchase data and changes in US real yields, which could extend or reverse the bullion rally.
- Indian import-duty, currency-management and gold-loan policy changes affecting landed costs and consumer liquidity.
- Organised jeweller commentary on same-store sales, inventory turns, making charges and gross-margin resilience.
- Increase assortment depth in lightweight, lower-ticket and modular jewellery while protecting aspirational design cues.
- Expand exchange, old-gold recycling, instalment and booked-price programs to convert affordability-constrained shoppers.
- Tighten gold inventory days and hedge procurement exposure to limit mark-to-market and working-capital volatility.
- Prioritise bridal, gifting and high-repeat urban catchments; reduce dependence on speculative bullion-linked walk-in demand.
- Monitor franchisee and independent-store stress as high inventory financing costs may create consolidation and store-acquisition opportunities.