India witnessed a historic shift in gold consumption patterns during the March quarter, as investment demand for the precious metal overtook jewellery demand for the first time ever, according to the World Gold Council (WGC).

The surge in investment interest comes amid muted returns in equity markets, prompting investors to turn towards gold as a safer alternative. While rising gold prices dampened jewellery purchases, strong investment inflows helped keep overall demand steady.

Sachin Jain, CEO of WGC India, highlighted the significance of this shift, stating that investment demand is expected to play an increasingly important role in the coming quarters, with both retail and financial investors showing growing interest in gold.

During the March quarter, gold investment demand jumped sharply by 52% year-on-year to reach 82 metric tons. In contrast, jewellery demand declined by 19.5% to 66 tons due to elevated prices.

Despite the drop in jewellery buying, total gold consumption in India rose by 10.2% to 151 metric tons. Notably, investment demand accounted for 54.3% of total consumption during the quarter—well above its usual share of around 25%.

The rise in gold prices has encouraged investors to shift towards alternative investment avenues such as coins, bars, and gold exchange-traded funds (ETFs). In particular, gold ETF inflows surged 186% compared to the previous year, hitting a record 20 tons.

Weak stock market performance in recent months has further driven investors towards gold-backed assets, a trend that experts believe is likely to continue in the near future.