Gold Hits ₹1 Lakh in India: What’s Fueling the Frenzy?
Gold prices in India surge past ₹1 lakh per 10 grams amid economic uncertainty, central bank demand, and a weakening US dollar
Gold Hits ₹1 Lakh in India: What’s Fueling the Frenzy?
New Delhi/Mumbai – April 22, 2025:
Gold prices in India have scaled an unprecedented peak, crossing ₹1 lakh ($1,200) per 10 grams for the first time in retail markets—leaving investors, jewelers, and policymakers equally stunned. This landmark moment comes just ahead of Akshaya Tritiya, a festival traditionally marked by gold purchases, but experts say festive demand is only part of the story.
In the span of a single day, 24-carat gold surged by ₹3,330, according to the India Bullion and Jewellers Association. Silver also marched upward, now priced at ₹95,900 per kilogram. On the futures front, gold contracts expiring in early June climbed sharply on the MCX, closing in on the ₹1 lakh threshold, with no signs of slowing.
But beyond seasonal traditions, what’s really driving this extraordinary rally?
Global Anxiety Fuels Flight to Safety
The world economy is wobbling, and gold is shining brighter because of it.
Major economies like the US, China, and Germany are showing signs of fatigue—burdened by inflation pressures, weak manufacturing output, and shaky consumer confidence. Ongoing geopolitical tensions, especially in Eastern Europe and the South China Sea, are further rattling nerves.
“Gold thrives on uncertainty,” says Kaynat Chainwala, AVP at Kotak Securities. “With every trade skirmish or interest rate standoff, gold becomes more attractive to investors looking for stability.”
This shift is evident in the COMEX market as well, where gold briefly breached the $3,500 per ounce mark, buoyed by the weakening of the US dollar and ongoing financial market turbulence.
A Softening Dollar Makes Gold Even More Attractive
A major driver behind gold’s surge is the falling US dollar, which recently slipped to a three-year low. When the greenback stumbles, gold—priced globally in dollars—becomes cheaper for investors using other currencies, triggering a spike in international demand.
This has amplified gold buying in emerging economies and added further pressure on supply.
“The dollar’s decline has flipped the script,” explains Satish Dondapati, Fund Manager at Kotak Mahindra AMC. “It’s made gold more accessible globally, just as market volatility is pushing people toward safer assets.”
Central Banks Are Quietly Hoarding Gold
Behind the scenes, central banks are building a golden wall of defense.
From India to China, nations are stocking up on gold to hedge against currency risk and global market shocks. A report from Tata Asset Management highlights that central banks may add as much as 100 tonnes of gold per month in 2025—up from previous annual averages.
“This isn’t just about reserve diversification,” says Anitha Rangan of Equirus Securities. “It’s about strategic protection. Gold’s share in global reserves is now at its highest in two decades—and growing.”
The strategy seems to be paying off. With every ton added, confidence in gold as a dependable asset increases, reinforcing the upward price momentum.
Should You Buy Gold Now? Experts Weigh In
Amid the price surge, many are asking whether now is the right time to invest—or if the rally has peaked.
Analysts suggest exercising both interest and caution. “While the trajectory looks promising in the short term, especially if tensions continue, we could see minor corrections,” says Rangan.
Chainwala adds that the long-term outlook remains bullish: “Central bank support, inflation concerns, and a potentially weaker dollar will keep demand high. But expect a few speed bumps as markets adjust.”
What This Means for You
For Indian households, where gold is woven into both tradition and investment planning, the ₹1 lakh milestone is symbolic—but not necessarily prohibitive. Jewelers report steady foot traffic, with many buyers opting for smaller quantities or gold-backed financial instruments.
For global investors, this is a clear signal: gold is back in the spotlight as the world navigates economic instability. Whether held in physical form or ETFs, gold is proving it still has the power to preserve wealth—and calm nerves—in turbulent times.
Conclusion: Gold’s Golden Moment May Just Be Beginning
The surge in gold prices is not merely a reflection of seasonal buying or market speculation. It’s a symptom—and a signal—of deeper economic shifts playing out across continents. As the world grapples with inflation, geopolitical upheaval, and shaky growth forecasts, gold is asserting itself as more than just a precious metal. It’s a mirror to global anxiety and a vault of collective trust.
Whether you’re an investor, a policymaker, or a consumer planning a wedding purchase, one thing is clear: gold’s rally isn’t just a flash in the pan. It may very well be the start of a new financial era.
Disclaimer:
The views and investment suggestions shared in this article are for informational purposes only and reflect the perspectives of the analysts cited. Always consult a certified financial advisor before making investment decisions.
source : Jagran English