Weak Indian buying removes an important source of physical support for gold, leaving prices more reliant on central bank purchases and fund inflows. Lower imports would ease pressure on India’s trade deficit and offer modest support to the rupee, though the reported rise in unofficial inflows means official import data may understate actual demand. The Diwali and wedding season is the near-term test: a muted festival response would confirm that current prices have moved beyond what Indian households will pay. For the wider gold market, it reinforces a pattern of strong official demand alongside a retreat by price-sensitive consumers.---Earlier:Central bank gold buying jumps 42% in Q3 as high prices hit jewellery demand, WGC says---The world’s second-biggest gold buyer is pulling back, priced out by gold’s rally and squeezed by a failed monsoon, just as its key buying season begins.Summary:The WGC expects India’s 2026 gold demand to fall to around 650 tons, the lowest since 2020September-quarter demand fell 29% to around 160 tons, with jewellery down 20% and investment down 40%Rising living costs since the Iran war and the weakest monsoon in more than a decade are weighing on rural buyingRural areas account for more than half of India’s gold demandFestival and wedding demand should lift the December quarter, but high prices are expected to cap the recoveryOfficial imports fell partly due to more unofficial inflows after higher import dutiesIndia’s gold demand is expected to fall to a six-year low in 2026, as elevated prices weigh on jewellery buying and investment demand weakens, the World Gold Council said on Tuesday, according to Reuters.The industry body expects total demand in the world’s second-largest gold consumer to fall to around 650 metric tons this year. That would be the lowest since 2020, when pandemic lockdowns forced jewellery shops to close. Sachin Jain, chief executive of the council’s Indian operations, told Reuters that weaker jewellery sales over the first nine months of the year would drag down the annual total.Demand fell 29% from a year earlier to around 160 tons in the September quarter, Jain said. Jewellery purchases dropped 20%, while investment demand fell 40%.The figures show high prices hitting Indian buyers harder than the global market. The council’s global report, also released on Tuesday, showed worldwide demand roughly flat on the year in the third quarter, with strong central bank buying offsetting weaker jewellery and retail investment.Indian households are also facing rising living costs following the Iran war, and the weather has added to the strain. The 2026 monsoon delivered its lowest rainfall in more than a decade, cutting farm output and incomes in rural areas. Those areas account for more than half of the country’s gold demand, and jewellery there serves as a traditional store of wealth.Jain said demand should pick up in the December quarter, when festivals and the wedding season typically lift purchases. Diwali, when buying gold is considered auspicious, falls in early November. However, the council said high prices and the weak rural economy were likely to limit any recovery.India’s official gold imports also fell in the September quarter. Jain attributed part of the decline to a rise in unofficial inflows after the government raised import duties on gold earlier this year. That suggests official data may understate how much gold is entering the country. This article was written by Eamonn Sheridan at investinglive.com.