Market Indicators and Solar Capacity
- Gold discounts in the Indian local market widened from $24/oz to $90/oz (briefly touching $140/oz) by the end of August 2026, while MCX vault holdings fell to 2t (p. 1).
- India added a record 27.0GW of solar capacity in H1 2026, representing a 49% year-over-year increase, with Q2 2026 installations reaching 11.7GW (p. 1).
Rise of Cash-for-Gold Schemes and Structural Shifts
- Large Indian jewellery chains are actively promoting cash-for-gold buyback schemes, expanding them to include jewellery purchased from other retailers (p. 1).
- This shift improves price transparency and encourages households to monetize gold through formal channels, reducing the share of unorganized players (p. 1).
- The transition is supported by large gold refiners expanding scrap collection centres in smaller cities to reduce turnaround times and improve accessibility (p. 5).
Gold Supply, Recycling, and Household Holdings
- India consumes 700-800t of gold annually but produces only 15-18t from mines, making recycling a crucial source to reduce import reliance and pressure on the rupee (p. 3).
- Indian households hold an estimated 27,000-30,000t of gold, but only 200-250t typically returns to the market as scrap each year (p. 3).
- Gold-backed credit has risen sharply from Rs.0.71tn ($8bn) in December 2021 to Rs.5.4tn ($57bn) by June 2026, allowing households to raise liquidity without selling jewellery (p. 3).
Recycling Trends and Projections
- Gold scrap supply fell to 93t in 2025, but is projected to rise by 11% year-over-year to 103t in 2026 (pp. 5, 7).
- Gold-for-gold exchange transactions are estimated to account for 68% to nearly 70% of jewellery purchases involving recycled metal in 2026, the highest level since 2010 (pp. 5, 7).
- A below-average monsoon (expected to finish 15% below average) could lower crop yields and rural incomes, potentially driving distress-related gold selling (p. 7).

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