The recent surge in gold prices, soaring by 30% in just one year, has significantly impacted local jewellery demand. Traditionally, wedding purchases—the backbone of the jewellery market—have taken a hit, with consumers opting for lighter pieces instead of extravagant options. As Akshaya Tritiya approaches on April 30, expectations for gold sales are notably subdued.
Current Gold Prices: A Closer Look
As of now, the price for 24-carat gold is around Rs 95,000 per 10 grams and is projected to reach the Rs 100,000 threshold by the time of the festival. Rajiv Popley, director of the Popley Group, acknowledges that while the high gold prices pose a challenge for buyers, the demand remains steady. “Given last year’s impressive sales figures, replicating that success may prove difficult,” he commented.
Global Gold Market Dynamics
On the international front, gold is trading at approximately $3,327 per ounce. This increase has been fueled by financial market instability and a depreciating US dollar, largely caused by significant tariff hikes on imports instituted by the Trump administration.
Central banks worldwide are also recognizing gold’s value, having acquired over 1,000 tonnes annually for the past three years, as reported by the World Gold Council.
Record Returns and Future Projections
The global gold market shows no signs of slowing down. Predictions for the 2024-2025 period suggest an impressive 39.75% return, the highest in four decades, according to Kedia Commodities. Since January, prices have surged by 27%. Goldman Sachs forecasts that, under high-risk conditions, gold could reach $4,500 per ounce by the end of 2025. This trend indicates gold is increasingly viewed as a viable asset class.
UBS strategist Joni Teves recently highlighted the growing importance of gold in today’s economic climate. “In an era marked by escalating tariff uncertainties, sluggish growth, inflation, and geopolitical tensions, the rationale for incorporating gold into investment portfolios has never been stronger,” she stated.
India’s Gold Import Landscape
Gold ranks among India’s top non-oil imports, alongside electronics and machinery. In the 2024-2025 fiscal year, India imported gold worth $63.3 billion, marking a striking 39% increase compared to the previous year. The MCX reports a 32% rise in gold spot prices during this period, greatly outpacing the Nifty 50 equity benchmark, which saw only a 5% gain.
Expert Opinions on Future Trends
While the current gold rally is impressive, some experts predict a potential slowdown. Ajay Kedia, director of Kedia Advisory, believes that prices may peak at $3,520 per ounce before experiencing a downward trend, possibly dropping to $2,700 or even $2,340 per ounce thereafter.
In summary, the gold market is undergoing significant fluctuations influenced by various economic factors. As consumers navigate these changes, understanding the implications of rising prices and global trends will be crucial for making informed purchasing decisions.
