Global gold consumption has reached an unprecedented 5,000 metric tonnes in CY25, registering an 8% year-on-year growth even as prices remained elevated. According to the latest CareEdge Ratings report, this milestone was primarily driven by robust investment demand, with safe-haven buying accelerating amid geopolitical tensions, macroeconomic uncertainty, and expectations of softer interest rates globally. The growth reflects a structural shift where gold is increasingly viewed as a financial asset rather than a consumption-driven commodity, with investment demand emerging as the key driver of global consumption patterns.
India's gold investment share has risen sharply to 42% in CY25 from 29% in CY24, driven by ETFs and bullion demand amid market uncertainty. According to CareEdge Ratings, investment demand surged to record levels globally and in India, led by gold ETFs and bar-and-coin buying, reflecting safe-haven demand, diversification motives and uncertainty. The composition of global gold consumption has undergone a structural shift with the share of jewellery falling by 19% year-on-year to 33% in CY25, much below the 15-year average of 50%. This trend is visible in the Indian market as well where the share of jewellery consumption fell below 60% of total gold purchases in CY25 compared to the long-term average of 70%.
Global gold ETF holdings have reached a historic 801 MT, marking the second-highest level on record, while ETF share in consumption has surged dramatically to 16% in CY25 from near zero in CY24. According to CareEdge Ratings, this represents a structural shift in global gold consumption patterns, with ETF investment contributing over 800 MT to annual investment demand of 2,175 MT in CY25, smashing the previous record of 1,805 MT in CY20. The trend is particularly evident in India with strong ETF investments by Indians in the last two years, adding 37.5 tonnes in CY25, more than the combined investment in the last 10 years. Central banks continued aggressive accumulation for the fourth consecutive year, purchasing 863 MT in CY25, well above the long-term average, reflecting a broader strategy of reserve diversification and reduced reliance on dollar-denominated assets.
The composition of global gold consumption has undergone a structural shift with the share of jewellery falling by 19% year-on-year to 33% in CY25, much below the 15-year average of 50%. According to CareEdge Ratings, this trend is visible in the Indian market as well where the share of jewellery consumption fell below 60% of total gold purchases in CY25 compared to the long-term average of 70%. As reported by CareEdge Ratings, consumers responded to elevated prices by reducing discretionary jewellery purchases, though Indian jewellery demand remains resilient with purchases rising 10% year-on-year to ₹4.8 lakh crore in CY25. However, volume has declined by 15% in CY25, which is reflective of the price-sensitive nature of jewellery demand, where preferences shifted towards lower-carat/lighter-weight jewellery. The sustained rally in gold prices is attributed to structural rather than cyclical factors, with persistent geopolitical risks, trade fragmentation, and concerns over global fiscal stability reinforcing gold's appeal as a safe-haven asset.
Speaking on gold consumption patterns, Akhil Goyal from CareEdge Ratings noted that geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue investment demand for gold, with its share in overall gold consumption projected at 35-40% in FY27. The company's sample of six large, listed jewellers is expected to report stellar revenue growth of 35% year-on-year in FY26 and 20-25% year-on-year in FY27, led by continued store additions and market share gains. Operating profit margin is likely to expand by 180-200 basis points in FY26 supported by inventory gains, which is likely to normalise to 6.5-7% in FY27 led by expectations of range-bound gold prices and front-loaded operating expenses on new stores. Lower real yields and expectations of monetary easing have further reduced the opportunity cost of holding non-yielding assets like gold, with these structural drivers expected to continue supporting investment demand.
Retailers have continued healthy new store addition in FY26 to expand their retail presence, with the cohort estimated to have added 310 stores in the year, representing the second consecutive year of 300+ new store additions. According to CareEdge Ratings, expansion of retail footprint through the franchisee route remains the preferred mode, with the share of franchisee stores in overall retail presence estimated to increase to 62% in FY26 from less than 60% in FY23. However, new store addition as a percentage of existing stores has halved to 11% in FY26 from 20%+ over the previous three years, indicating cautious optimism towards expansion amid the sector's continued formalization. The shift from jewellery-led to investment-led demand has been accompanied by strong growth in bar-and-coin demand as well as ETFs, indicating rising preference for gold as a portfolio diversification tool.
