These factors are contributing to a partial reduction in gold jewellery consumption. However, H1 FY2026 is estimated to have witnessed over 20 per cent YoY decline in domestic gold jewellery volumes. Additionally, retailers who do not completely hedge their gold purchases could see margin improvement due to continuing rise in gold prices. Meanwhile, rising gold prices have shifted consumer and retailer preferences toward studded and lower carat gold jewellery, a trend further supported by the government’s approval for hallmarking gold as low as 9 carats, increasing the share of stylish jewellery segments. Gold jewellery retailers are experiencing a significant increase in working capital needs as gold prices continue to climb, which is likely to increase the industry’s financial leverage in the near to medium term.