Gold Prices In India Exceed Rs 80,000 Per 10 Grams: What’s Driving the Surge?

Gold prices in India soared past the Rs 80,000 mark per 10 grams for the first time IN 2025, as noted by the India Bullion and Jewellers Association (IBJA). As per an ET report, data from the India Bullion and Jewellers Association (IBJA) revealed that 24-carat gold closed at ₹80,194 per 10 grams. This significant increase to Rs 80,194 underscores a growing preference for the precious metal among investors seeking a safe haven amidst the economic instability anticipated from Donald Trump's presidency. The decrease in the value of the dollar has played a substantial role in the gold price surge, reflecting broader market anxieties.

The weakening of the dollar, notably after it hit a high of 110.17 last week due to expected trade tariffs, has seen a decline in recent sessions, with it falling in five out of the last six. This downtrend has encouraged a pivot from dollar investments towards gold, enhancing its appeal as a reliable investment during times of economic uncertainty. The dollar index, a gauge of the US dollar's strength against a basket of foreign currencies, has inversely mirrored the ascent of gold prices.

Renisha Chainani, the head of research at Augmont Gold based in Mumbai, links the uptick in gold prices directly to the Trump administration's policies, including heightened tariffs and trade unpredictabilities. Chainani forecasts that gold prices could stabilize by mid-2025 if there is a reduction in tariffs and an improvement in global trade conditions. She warns, however, that until such geopolitical and economic clarity emerges, the high gold prices are likely to dampen consumption, especially in cost-sensitive markets like India, though demand from urban and institutional investors might remain robust as they hedge against economic uncertainties.

The surge in gold prices not only reflects geopolitical and economic factors but also poses questions about the future of retail jewellery sales in India. Industry experts from IBJA and the bullion trade highlight concerns that the spike in gold prices could impact the remaining wedding season's sales. With the price of 24-carat gold reaching new heights, the affordability and demand for gold jewellery among consumers may face uncertainty.

Despite the current highs, the gold market witnessed a closure at Rs 79,453 per 10 grams on Tuesday, indicating a slight fluctuation in prices. This follows a previous peak on October 30, 2024, when gold prices hit Rs 79,681 per 10 grams. The fluctuations in the gold market underscore the dynamic nature of global economic forces and their impact on commodity prices.