India’s gold demand slipped to its lowest level in six years during the April-June quarter, pushed down by record-high prices, a steep increase in import duty and a weak buying season despite the boost from Akshaya Tritiya-induced purchases, according to the World Gold Council (WGC).At the same time, increased smuggling and a surge in gold loans underscored the precious metal’s enduring appeal, it said.Also read: Gold pulled India back from the edge of crisis 35 years agoIndia consumed 131 tonnes of gold during the quarter, down 6% from a year earlier and 13% sequentially. The volume was well below the long-term quarterly average of 188 tonnes, making it the weakest June quarter in six years. However, elevated prices pushed the value of gold purchases to a record Ra 1,97,900 crore, up 35% year-on-year and 50% from the previous quarter.Jewellery demand stood at 75 tonnes during the quarter, up 14% from the January-March period but 15% lower than a year earlier, making it the second-lowest April-June jewellery demand recorded by the WGC since 2000.Demand received an initial lift from Akshaya Tritiya, when Hindus and Jains consider it auspicious to buy gold, and the wedding season as gold prices eased from their first-quarter highs. Buying, however, declined sharply after mid-May following the increase in import duty to 15%, the month-long inauspicious period for weddings and the Prime Minister’s appeal to curb gold purchases.With domestic gold prices nearly 60% higher than a year ago, consumers increasingly shifted towards lighter, lower-carat and studded jewellery. Jewellers also reported a 10-20% increase in exchange-led purchases, with exchanged jewellery accounting for as much as 70% of sales at some stores.Investment demand also moderated after three consecutive strong quarters. Total investment demand, including bars, coins and exchange traded funds, fell to 54 tonnes from about 100 tonnes over the previous three quarters. Demand for bars and coins declined 19% sequentially to 50 tonnes, while digital gold purchases fell to 4.8 tonnes from 6.5 tonnes in the preceding quarter.The WGC attributed the slowdown to a pause in the gold price rally, which reduced momentum-driven buying. Even so, investment demand remained above its long-term average, indicating that investors continued to view gold as a preferred hedge amid global uncertainty.The WGC said that smuggling of gold increased after the surge in import duty. “Smuggling has increased due to the higher import duty. We are currently carrying out a study on it," said Sachin Jain, CEO India, WGC, adding that India’s gold demand for 2026 is expected to remain in the range of 650-750 tonnes.Even as fresh purchases slowed, consumers showed little inclination to sell their existing gold. Net recycling, or gold sold for cash, fell to 19 tonnes during the quarter, down 38% sequentially and 17% from a year earlier, the lowest level in 11 quarters.Also read: Gold tariff hike boosts grey market, hurts organised trade, says WGCInstead, households increasingly turned to gold loans to meet their liquidity needs. Outstanding gold loans by banks more than doubled to Rs 5,10,000 crore at the end of May, while gold loan portfolios of non-banking finance companies expanded 70% year-on-year to Rs 3,30,000 crore.According to the WGC, gold loans have become the second-largest retail lending segment after housing, reflecting borrowers’ preference to unlock liquidity without parting with their jewellery. While lenders continue to maintain comfortable loan-to-value ratios, the council cautioned that a sustained fall in gold prices could weaken collateral buffers and increase credit risks.