Gold prices in India surpass ₹80,000/10g for first time
What's the story
Gold prices in India have hit an all-time high, breaching the ₹80,000 mark per 10gm. The unprecedented spike is largely attributed to investors flocking to the precious metal amid looming market instability.
Donald Trump's presidency is expected to disrupt the market and a global dip in the dollar's value are major factors contributing to the trend.
According to India Bullion and Jewellers Association (IBJA) data, 24-carat gold closed at ₹80,194 per 10gm on Wednesday.
Market shift
Dollar's decline and gold's rise: A parallel trend
Notably, the global weakening of the dollar has also coincided with the rise in gold prices.
The dollar index, which measures the US dollar's value against a basket of foreign currencies, has been on a downward trend in five out of six recent sessions.
This pattern has prompted global investors to shift their investments from the dollar to gold, further fueling the price increase.
Market impact
Uncertainty looms over retail jewelry sales amid gold price surge
The continuous surge in gold prices has put a cloud of uncertainty over retail jewelry sales for the remaining wedding season.
Renisha Chainani, research head at Mumbai-based Augmont Gold, blames the Trump-era policies, including higher tariffs and trade uncertainties, for the price hike.
She says future price stability could depend on geopolitical clarity and reversal in dollar trends.
Consumption concerns
High gold prices may impact consumption in price-sensitive markets
Chainani warns that high gold prices could affect consumption, especially in price-sensitive markets like India.
However, she also notes that urban and institutional investors may continue to use gold as a hedge against economic uncertainties. This could keep demand relatively high despite the rising costs.
"A pause or reduction in tariffs and improved global trade conditions could stabilize gold prices by mid-2025," Chainani said.