Market Performance
Gold prices in India have surged past the ₹1 lakh mark per 10 grams for the first time in history. On Tuesday, 24-karat gold was priced at ₹1,01,350 per 10 gm in the Mumbai bullion market. Meanwhile, 22-karat gold stood at ₹92,900 per 10 gm, reflecting the strong global rally.
International gold prices also hit a new high, crossing $3,400 per ounce, as the US dollar continued to weaken. This rise is drawing fresh attention to gold as an investment, especially in uncertain times.
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What’s Driving the Surge in Gold Prices?
The dramatic rise in gold prices is being driven by several global and domestic factors:
- Weaker US Dollar: The dollar hit its lowest level since 2022, making gold cheaper for foreign currency holders.
- US Federal Reserve Uncertainty: President Donald Trump’s criticism of Fed Chair Jerome Powell and his plans to overhaul the institution have shaken investor confidence.
- Geopolitical Tensions: Ongoing Russia-Ukraine conflicts and trade tensions are prompting a shift to safe-haven assets.
- Strong Central Bank Demand: Global central banks are increasing gold reserves to hedge against inflation.
- Inflation Concerns: Persistent inflation fears are pushing investors toward more stable assets like gold.
Gold has gained nearly 59% since March 2024, proving its value once again as a safe-haven investment.
US Dollar Impact on Gold
The ICE US Dollar Index, which tracks the greenback against major global currencies, dropped to 97.92, its lowest since 2022. This decline is further boosting the appeal of gold as an investment option for international buyers.
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India’s Position in the Global Gold Market
India retains its position as the second-largest gold market globally, only behind China. Recent data from the World Gold Council (WGC) highlights the country’s growing appetite for gold:
- Gold demand in 2024: 802.8 tonnes (up from 761 tonnes in 2023)
- Total gold value: ₹5.15 lakh crore (a 31% jump from ₹3.92 lakh crore in 2023)
These numbers underline the significant role of gold in Indian households—not just culturally but also financially.
Rise in Gold Loans
With prices at record levels, many Indians are leveraging gold as an investment by securing loans against it. This trend has been rising due to:
- Economic slowdown and rising expenses
- Widespread access to digital gold loan platforms
- Gold being a liquid and trusted asset
In times of uncertainty, many prefer pledging gold for urgent needs like education or medical expenses, reaffirming gold’s financial utility beyond just savings or adornment.
Summary of the Article
Gold has once again solidified its reputation as a reliable and strategic investment asset. The crossing of the ₹1 lakh milestone highlights:
- A global shift towards safe-haven assets
- India’s deep-rooted reliance on gold for both cultural and financial security
- Growing interest in gold as an investment, especially during economic or geopolitical turbulence
With factors like inflation, weakening dollar, and central bank buying in play, gold’s position as a long-term investment is stronger than ever.
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