In a remarkable turn of events, gold prices in India have surpassed the ₹1 lakh mark per 10 grams, a level never reached before in the country’s bullion market. This historic surge has stirred significant interest among investors, economists, and everyday consumers alike. But what exactly is fueling this rapid rise in the price of the yellow metal?

The GOLD Price Global Picture: Economic Uncertainty and Safe-Haven Demand

One of the biggest factors influencing the rise in gold prices is the increasing global economic uncertainty. As markets around the world struggle with volatility due to geopolitical conflicts, trade imbalances, and a wavering post-pandemic recovery, investors are flocking to gold as a safe-haven asset.

In particular, tensions in the Middle East, ongoing conflicts in Eastern Europe, and concerns over inflation in the U.S. and Europe have all added to global instability. Traditionally, in times of financial distress or geopolitical tension, gold becomes a preferred investment, pushing demand—and prices—upward.

Weakening Dollar: A Global Push Toward Gold

Another major contributor is the decline of the U.S. dollar. The dollar has been losing strength due to dovish monetary policies by the U.S. Federal Reserve and mixed signals on interest rate cuts. When the dollar weakens, commodities priced in dollars, like gold, become cheaper for investors using other currencies, which increases demand globally.

Central Bank Buying Supports Gold Surge

Over the past year, central banks around the world have been stockpiling gold reserves at record levels. Countries like China, Russia, and India have increased their purchases as a means to hedge against currency volatility and geopolitical risk.

This institutional demand has created a floor for gold prices, ensuring that even retail fluctuations don’t push them down significantly. The sustained buying by powerful institutions adds further momentum to the bullish gold trend.

Local Demand Ahead of Akshaya Tritiya

In India, the timing of the gold price surge is also aligned with Akshaya Tritiya, an auspicious occasion for buying gold. Every year, this festival sees a spike in gold purchases, especially in jewelry and ornaments.

Despite the high price tag, jewelers across the country have reported solid interest, with many consumers making token purchases or opting for lightweight items. The cultural significance of gold in Indian households cannot be underestimated, even when prices are at historic highs.

Impact on Indian Consumers and Investors

This price milestone has brought mixed reactions from different sections of the population. While long-term investors and holders of gold are celebrating the appreciation of their assets, first-time buyers and small investors are feeling the pinch.

Many consumers are now shifting toward digital gold, gold ETFs, and sovereign gold bonds as alternatives to physical gold, which offer flexibility and security without the additional costs of storage or making charges.

Analysts’ View: Will Gold Continue to Climb?

Market analysts are divided on whether gold will continue to climb or face a correction. Some believe that if geopolitical tensions and inflation persist, gold could see further gains in 2025, potentially breaking new international records as well.

Others caution that if the global economy stabilizes or if interest rates are adjusted in major economies, some of the recent gains could be rolled back.

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