The price of 24-carat gold reached Rs 98,100 (ten-gram) in New Delhi’s bullion market on April 16, while benchmark spot gold in the international market crossed the record high of $3300 per ounce. At the same time, US futures on Comex reached a record high of $3318 per ounce. It is worth mentioning that the price of gold increased by more than Rs 20,000 between January 1 and April 15 this year. Looking at the current trend of rising gold prices, gold could easily reach the significant milestone of ‘one lakh’ in April.
There are many reasons for the increase in the price of gold, the most important of which is the economic policies adopted by US President Mr. Donald Trump. These policies, which include tax reforms and trade tariffs, have led to a potential trade war with China. This uncertainty has increased the possibility of a global trade war, prompting people to invest in gold for better returns, thereby increasing the demand for gold. For example, investment in Gold ETFS has risen by 12% to $8.6 billion worldwide.
Amidst the economic shifts, the global geopolitical landscape plays a significant role in the rise of gold prices. The increasing tensions in various parts of the world add a brighter shine to gold. This, combined with the recent stock market downturn, is compelling investors to turn to gold as a safe investment option. The urgency and relevance of these geopolitical tensions directly impact the rise in gold prices, making it a key factor to consider in the current market.
Inflation has reduced slightly in India, but the fear remains in foreign countries. In March 2025, retail inflation in India increased at 3.34% annually, while in February, it increased at 3.61%. It is noteworthy that retail inflation is at its lowest level in the last 67 months. Here, wholesale inflation has also declined and came down to 2.05% in March, while in February, it was at 2.38% and in January, it was at 4.31%.
The wedding season is going on in India, and the price of gold is continuously increasing. The jewellery industry is also worried about the current situation, because the increased prices have significantly reduced the demand for jewellery. Therefore, to deal with the current crisis and enable ordinary people to buy gold, gold jewellery manufacturers emphasise the sale of 14-carat gold. Advertising and other means of promotion are also being used in this matter. Along with this, efforts are also being made to hallmark 9-carat gold so that ordinary people can keep the excitement and joy of the wedding intact by buying low-carat gold according to their status.
According to a World Gold Council (WGC) report, the demand for gold in India was the highest in 2024. Still, those investors who have invested in gold only to earn a profit are taking advantage of such a situation and selling gold coins and jewellery. According to the World Gold Council, 34.8 tonnes of gold were sold for cash in the March quarter of 2023, while 38.3 tonnes of gold were sold in March 2024, and according to an estimate, more than 40 tonnes of gold are likely to be sold in the last quarter of the current financial year.
The journey of gold prices in India is fascinating. When India gained independence, the cost of 10 grams of 24-carat gold was a mere Rs 88.62. By 1964, this had fallen further to Rs 63.25. Over the years, the price of gold has steadily risen, crossing 98 thousand rupees in 78 years. This historical perspective gives us a deeper understanding of the current gold market and its implications.
India cannot supply the domestic demand for gold, as the expected amount is not produced here. Therefore, in the case that our country is entirely dependent on exports. In the 11 months of 2024, India imported a total of US$ $ 47 billion worth of gold, the highest level ever, whereas in 2023, India imported a total of US$ $ 42.6 billion worth of gold. By the way, China buys the most gold in the world. It bought 224.88 metric tons of gold in the year 2023. In the same year, Turkey bought 130.64 metric tons, Poland 130.03 metric tons, Singapore 76.28 metric tons, Libya 30.01 metric tons, the Czech Republic 18.71 metric tons and Iraq 8.12 metric tons of gold.
Gold is precious in India because women are really into gold, and this craze has continued since immemorial. In ancient times, men and women wore gold ornaments. Its proof has been found in the remains of the Harappa and Mohenjo-Daro periods. In that period, both men and women used to wear gold ornaments.
However, now men have started wearing ornaments again. In India, gold is purchased on any auspicious occasion, such as during marriage, a festival, or a death, whereas this does not happen in Western countries. People there do not wear a lot of ornaments on their weddings. There is no trend of giving gold ornaments or gold as gifts. In the US and Europe, only gold rings are given in marriage, which are of 9 or 12 carats, whereas in India, 22 or 24 carat gold is given to the boy and the girl in the form of jewellery. Nowadays, gold biscuits are also provided as gifts at weddings.
Our country’s wedding season is underway, so the demand for gold in India will likely increase further in the coming days. On the other hand, the price of gold is continuously growing due to reasons like Trump’s policies, the threat of trade war, current global uncertainties, geopolitical tensions in some parts of the world, the continuous weakening of the rupee against the dollar, the recent fall in the stock market, etc.
Satish Singh, Ahmedabad-based Senior Columnist, views are personal.
