Core Insights - The report by MetalsFocus indicates that gold prices have reached record highs in 2025, impacting consumer purchasing behavior in India, particularly in the jewelry sector [1][4] - The demand for gold jewelry in India has significantly decreased, with a 25% year-on-year drop in Q1 2025, reaching a low of 71 tons, the lowest since Q3 2020 [1][4] Group 1: Impact of Gold Prices on Demand - The surge in gold prices has led to a decline in consumer purchasing power for gold jewelry, resulting in a shift towards lower karat gold options [1][2] - The total sales of jewelry in India during Q1 2025 saw a significant portion, estimated at 60%, coming from old jewelry exchanges for new pieces [2][3] - Retailers are promoting lower-priced 14K and 18K gold jewelry to attract consumers, as traditional 22K gold jewelry still dominates the market with a market share of 75%-80% [2][3] Group 2: Consumer Behavior and Market Trends - The demand for wedding-related jewelry remains resilient, indicating a rigid demand that cannot be postponed [2][3] - The trend towards lower karat gold and lighter weight jewelry is driven by younger consumers, particularly in urban areas, reflecting a shift in fashion preferences [3][4] - Despite a 20%-30% decline in gold jewelry sales by weight compared to last year, the revenue has shown unexpected resilience, suggesting a potential recovery in consumer spending [4][6] Group 3: Future Outlook - The ability of Indian consumers to adapt to the new gold price levels will determine the pace of market recovery, with expectations of increased demand during the upcoming festive and wedding seasons [4][6] - The forecast for 2025 indicates a potential overall decline of approximately 13% in gold jewelry consumption compared to 2024, despite anticipated increases in consumer confidence due to a healthy economy [4][6]