Quick Overview
Jewellers anticipate a substantial increase in the demand for gold and silver by 2025, driven by factors such as heightened sustainability awareness, strong wedding season consumption, and ongoing geopolitical tensions. Predictions indicate that gold prices may reach Rs 85,000 per 10 grams, while silver is expected to see a significant rise as well.
Key Points
- Demand Growth Projections: Gold demand is expected to grow by 12-15%, while silver demand may increase by 15-18% by 2025.
- Price Expectations: Gold prices are forecasted to hit Rs 85,000 per 10 grams, influenced by market dynamics and consumer behavior.
- Market Context: India’s gems and jewellery market is projected to grow to US$ 100 billion by 2025, with a compound annual growth rate (CAGR) of 5-6%.
- Geopolitical Influences: Ongoing geopolitical tensions are expected to maintain upward pressure on gold prices.
- Consumer Trends: A growing preference for sustainable options and the influence of the younger generation are reshaping the jewellery market.
Gold and Silver Demand Projections for 2025 Detailed Breakdown
Demand Growth Projections
Rajesh Rokde, vice-chairman of the All India Gem & Jewellery Domestic Council (GJC), emphasizes the robust demand for gold and silver, projecting a growth of 12-15% for gold and 15-18% for silver by 2025. The anticipated increase is partly attributed to the expected 4 million weddings in India, which traditionally boost jewellery consumption.
Gold Price Prediction/Expectations
Gold prices are predicted to reach Rs 85,000 per 10 grams. This forecast is based on current market trends and historical price movements, with gold having delivered over 20% returns in 2024, outpacing major indices like Nifty 50 and S&P 500. The long-term appeal of gold is bolstered by its dual role as both an investment and a fashion accessory, particularly among younger consumers.
Market Context
The Indian gems and jewellery market is set to expand significantly, with projections indicating it could reach US$ 100 billion by 2025. The sector is expected to see a CAGR of 5-6%, supported by strong local and global consumer demand. Despite rising prices for precious metals, demand for gold and silver is not expected to diminish, particularly due to the influence of the middle class and younger demographics.
Geopolitical Influences
Geopolitical tensions, particularly in the Middle East and between Russia and Ukraine, have played a critical role in driving gold prices higher. Colin Shah, managing director of Kama Jewelry, notes that these tensions have contributed to a sustained rally in gold prices, with expectations that this trend will continue into 2025.
Consumer Trends
The jewellery market is increasingly influenced by younger consumers who prioritize sustainability and responsible sourcing. Rokde highlights a notable increase in demand for silver jewellery among this demographic, suggesting a shift towards more affordable and sustainable options.
In short:
Important Details
- Gold prices have shown a consistent upward trend, with a CAGR growth of nearly 10.5% over the past decade.
- The strong performance of gold in 2024, with returns exceeding 20%, reflects broader market conditions and investor sentiment.
- The anticipated rise in silver prices is driven by both industrial demand and growing investor interest.
Final Takeaways
The outlook for gold and silver demand in 2025 is optimistic, with significant growth expected due to cultural factors, market dynamics, and geopolitical influences. Gold prices are likely to reach Rs 85,000 per 10 grams, while silver is also set for a notable increase. The Indian jewellery market continues to evolve, driven by younger consumers and a shift towards sustainability, positioning it for robust growth in the coming years.
