Gold prices hit an all-time high on Tuesday (23rd September), reaching ₹1,14,480 per 10 gram for 24 karat gold, ₹1,04,950 per 10 gram for 22 karat gold and, ₹85,900 per 10 gram for 18 karat gold.
Gold prices in India have surged significantly since early 2024, influenced by several factors, including geopolitical tensions, economic uncertainties, Trump’s tariffs, and a depreciating US dollar. At the global level, gold prices also skyrocketed after the US Federal Reserve sliced interest rates last week. Compared to Gold prices five years ago, in 2020, the rise has been 112%. In 2020 (September 19, 2020), prices for spot gold (24K) stood at Rs 51,619 per 10 grams on the Multi-Commodity Exchange of India (MCX). This price has now reached ₹1,09,388. Even a year ago, the price was ₹72,874. Over the last five years, factors like the COVID-19 pandemic, the Russia-Ukraine war, US global tariffs, and other geopolitical uncertainties have impacted the prices of gold globally and in India. Despite rising prices, demand for the yellow metal has remained unchanged.
Over the last 20 years, the prices of gold have soared 1200%, from ₹7,638 in 2005 to over ₹1,00,000 in 2025 (till June), making the yellow metal the top-performing asset in 2025 and a reliable hedge.
Investors benefit, retailers suffer
In constant currency terms, gold has shown a steady growth of 17% and in India of 20% annually since 2020. While investors have gained from the rising gold prices, retailers are witnessing slow business as non-essential purchases and jewellery sales have taken a hit. Fluctuating gold prices make inventory planning difficult for retailers. Several investors have been prompted to assess whether they should hold their gold or sell it.
Gold is an indispensable part of India’s domestic life
In India, gold is not just an investment option but has deep cultural and emotional significance. The precious metal has acted as women’s financial security since ancient times. It forms an indispensable part of occasions like weddings and other auspicious occasions. According to a World Gold Council report, Indian households account for a quarter of India’s total gold demand.
India has been the second-largest consumer of gold in the world, falling behind China. However, last year India’s gold consumption reached 802.8 tonnes, surpassing China’s 511.4 tonnes in jewelry consumption. Jewellery sector accounts for the largest gold consumption in both countries. Indian families are estimated to hold around 24,000 tonnes of gold, which is said to be more than the total gold holdings of global central banks. Around one-third of India’s gold sales happen during weddings and festivals like Dussehra and Diwali.
However, the surging gold prices have impacted the metal’s demand at the household level. The demand for gold in Q2 of 2024 was recorded at 395 tonnes, and in Q2 of 2025, it declined to 341 tonnes. However, with the upcoming festival and wedding season, the demand for gold is likely to increase. Adjusting to the increased gold prices, customers are considering buying 18-carat and 14-carat gold jewellery studded with precious and semi-precious stones.
