Business News : The festive week has begun in India. Today, on November 3, gold prices are witnessing a decline of over Rs.1,500. The main reason for this decline is the fall in demand for gold. A report by the World Gold Council has surprised everyone. Higher gold prices in India touched a six-year low, leading to a fall in prices. This effect is likely to be felt in the coming days. This means, gold prices may see further decline. Let’s take a look at the World Gold Council’s report on gold demand.

Decrease in demand for gold

Gold demand in India may fall to a six-year low in 2026, the World Gold Council (WGC) said on Tuesday. This is because high gold prices are affecting jewelery sales and reducing the demand for gold for investment purposes. India, the world’s second-largest gold consumer after China, is grappling with rising inflation due to the Iran war.

Demand for jewelery expected to decline in rural areas

Demand for jewelery in rural areas is expected to decline due to weak monsoon. Sachin Jain, chief executive of WGC’s India operations, told Reuters that jewelery demand had declined in the first nine months of the year. This is expected to reduce total demand to around 650 metric tonnes, the lowest level since 2020. Jewelery shops were forced to close in 2020 due to the Covid-19 pandemic.

20% off on jewelry sales

Jain said gold demand fell 29% to 162.5 metric tonnes in the September quarter compared to the previous year. This includes a 20% reduction in jewelry purchases and a 40% reduction in investment demand. He said that demand is expected to improve in the December quarter, as major festivals like Diwali and the wedding season could encourage people to buy gold.

The country celebrated Dussehra in October and Diwali in early November, during which buying gold is considered auspicious. According to a WGC report released on Tuesday, high gold prices and weak monsoons are causing a slowdown in the rural economy, which may limit demand for gold.

Declining income in rural areas

More than half of India’s gold demand comes from rural areas, where jewelry is a traditional means of wealth accumulation for millions. The 2026 monsoon saw the lowest rainfall in more than a decade, affecting agricultural production and reducing farmers’ incomes. Jain said, India’s gold imports declined in the September quarter. One reason for this is that after the government increased the import duty on gold earlier this year, the flow of gold increased informally (without official records).