Gold prices cross Rs 1 lakh mark for first time amid global economic uncertainty
PTC Web Desk: For the first time in history, gold prices in India have surged past the Rs 1 lakh mark per 10 gram, reaching Rs 1,01,350 (excluding taxes) on Tuesday, as a culmination of global economic tensions and domestic demand dynamics. When taxes such as GST (3%) are included, the price rises by an additional Rs 3,040.50—Rs 1,520.25 each under CGST and SGST—bringing the total closer to Rs 1,10,000 after adding other levies like TCS.
The bullion rally is closely tied to global cues. International gold prices have soared above $3,400 per troy ounce, with current trading at around $3,486.85 in New York. A weakening US dollar, geopolitical volatility, and central bank buying have all contributed to the sharp uptick in gold prices. Notably, gold has surged nearly 59% since March 2024.
Several key global factors are driving this historic rise:
Dollar Depreciation: A declining dollar makes gold cheaper for foreign investors, boosting global demand.
US-China Trade Tensions: The escalating trade war and uncertain economic outlook have driven investors to safe-haven assets like gold.
US Monetary Policy Shake-Up: President Donald Trump's announcement to overhaul the Federal Reserve, coupled with his criticism of Fed Chair Jerome Powell for not slashing interest rates, has rattled markets.
Inflation & Geopolitical Risks: Rising US bond sales, low CPI figures, and concerns over inflation amid Middle East tensions and political changes in Europe have made gold a preferred investment.
India, the second-largest gold consumer after China, mirrors global pricing trends. In 2024, India's gold demand reached 802.8 tonnes, up from 761 tonnes in 2023. According to the World Gold Council, the value of gold demand surged by 31% to ?5.15 lakh crore.
Gold is deeply rooted in Indian culture and increasingly serves as a financial cushion. With economic uncertainties and rising household expenses, gold loans have grown in popularity. Pledging gold for loans has become common, aided by fintech solutions and digital platforms that have expanded access to credit, even in rural areas.
With gold solidifying its position as a safe-haven asset, investors are expected to continue favouring the yellow metal, especially as uncertainty clouds the global financial outlook.
- With inputs from agencies
