Despite record-high gold prices, overall market activity remained robust, reflecting the enduring allure of the precious metal during the country’s most celebrated festive season.

Dhanteras, which marks the start of the five-day Diwali festival of lights, is considered highly auspicious for purchasing gold and is traditionally one of the busiest gold-buying days in India, the world’s second-largest consumer of the metal.

This year, the surge in gold prices appears to have nudged buyers toward more cost-effective forms of gold ownership, including coins and bars.

According to Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council (GJC), overall sales volume during Dhanteras was slightly lower than last year, down 10–15%.

However, total sales value increased sharply due to the higher gold prices, highlighting the strength of consumer demand despite market fluctuations.

“Gold jewellery demand did see a reduction because of record-high prices, falling nearly 30% from last year, but coins and bars were in high demand and flew off the shelves,” said Surendra Mehta, secretary of the India Bullion and Jewellers Association (IBJA).

The preference for coins and bars over jewellery is largely driven by cost considerations. In addition to the price of gold, buyers typically pay 10–20% in manufacturing charges for jewellery, making coins a more economical choice for those looking to invest in the metal.

Local gold prices closed at 127,008 rupees per 10 grams on Friday, after hitting a record high of 132,294 rupees, representing a remarkable increase of more than 60% from last year’s Dhanteras.

Sachin Jain, CEO of the World Gold Council’s Indian operations, said the jewellery industry has responded to the price surge with attractive making-charge discounts, ensuring that festive and wedding-season demand remains strong.

“Consumers continue to show great interest in gold, and the industry is finding innovative ways to make jewellery purchases more accessible,” he said.

The market has also been seeing increased premiums on coins, with dealers quoting up to $25 per ounce over official domestic prices, inclusive of import and sales levies, the highest in over a decade.

Silver has mirrored gold’s strong performance, with demand for coins, bars, and jewellery rising this year. Dealers said investors view silver as a complementary asset to gold, with strong potential returns, particularly given recent market trends.

Saurabh Gadgil, chairman of PNG Jewellers, noted that silver continues to capture interest from both investors and traditional buyers, further boosting overall precious metals activity.

Higher returns from physically backed gold and silver exchange-traded funds (ETFs) have also contributed to investor interest, attracting inflows in recent months and reinforcing the long-term appeal of precious metals as a safe-haven investment.

“Jewellery stores remain open until midnight during Dhanteras, and with celebrations continuing into Sunday, we anticipate that buying momentum will carry forward,” said Rokde.

Overall, India’s festive gold market demonstrates resilience and adaptability, with consumers embracing both traditional and modern avenues to invest in precious metals.

The combination of strong cultural significance and smart investment choices has kept gold at the forefront of India’s festive spending, signaling a promising outlook for the industry in the months ahead.