Gold prices in India surge to unprecedented Rs 1.10 lakh per 10 grams

Gold prices in India on Tuesday surged to an unprecedented Rs 1.10 lakh per 10 grams in line with international market trends. Investors flocked to safe-haven assets amid economic uncertainty and a weaker US dollar.

On the global stage, gold hovered near record highs at USD 3,475 per ounce, while silver climbed to USD 40 per ounce. Both metals have posted year-on-year gains of 35 to 45 per cent, outpacing most asset classes, according to a report by Axis Mutual Fund.

Advertisement

The rally comes as the US dollar weakens, with the Dollar Index slipping to 97.7 from 110 in February.

Softer economic data has fueled expectations of Federal Reserve rate cuts, with markets now pricing in 60 basis points of easing by year-end and an 80 per cent chance of a September cut, according to CME FedWatch.

July’s US non-farm payrolls report added to the pressure, showing only 73,000 new jobs compared with expectations of 125,000, while inflation stood at 2.7 per cent year-on-year.

Notably, the gold demand rose 3 per cent year-on-year to 1,249 tonnes in Q2 2025, driven by safe-haven flows amid geopolitical tensions, trade frictions, and mounting political pressure on the US central bank.

Exchange-Traded Funds (ETFs) added 400 tonnes in the first half of 2025, while central banks collectively bought 166 tonnes as they diversified away from the US dollar, according to the World Gold Council.

Jewellery demand, however, slumped 14 per cent year-on-year to 357 tonnes, hovering near pandemic-era lows, as consumers in India and China deferred purchases.

In India, domestic gold prices surged past Rs 100,000 per 10 grams earlier this year, prompting many consumers to book profits by selling old jewellery while postponing fresh buying.

Authorities have moved to expand hallmarking standards to include 9-carat gold (37 per cent purity), aimed at improving affordability for price-sensitive buyers.

Silver has also benefited from dual demand, surging 40–45 per cent year-on-year, supported by secure buying and booming industrial usage. ETF inflows into silver hit a record 95 million ounces in the first half of 2025, lifting total holdings to 1.13 billion ounces valued at nearly USD 40 billion.