Gold and silver prices in India have been soaring to record highs, making it increasingly difficult for ordinary citizens to afford them. Currently, the price of one tola (10 grams) of gold stands at Rs 1,28,890, while one kilogram of silver is priced at Rs 1,90,000. Many are wondering why these precious metal prices continue to rise sharply. Experts point to both global and domestic factors behind the surge.
Global Factors
Across the world, geopolitical tensions and war fears are driving investors toward safe-haven assets. Ongoing conflicts such as the Russia–Ukraine war, tensions in the Middle East, and India–Pakistan border clashes have created an uncertain investment environment. In such times, investors prefer to park their money in gold and silver, traditionally considered secure investments. This surge in demand leads to higher prices.
Another key factor is global inflation, which erodes currency value and prompts people to protect their wealth by investing in precious metals.
Depreciation of the US Dollar
Gold prices are typically denominated in US dollars. When the dollar weakens, gold and silver become cheaper for buyers using other currencies, leading to increased demand and higher prices. Additionally, trade policies such as former US President Donald Trump’s tariffs have also contributed to price hikes.
Role of Central Banks
Central banks around the world have been increasing their foreign exchange reserves by purchasing large quantities of gold. These bulk purchases have pushed prices up in international markets. Moreover, when expectations arise that major central banks like the US Federal Reserve might cut interest rates, investors are drawn toward non-interest-bearing assets like gold, further boosting prices.
Domestic Factors
India imports most of its gold and silver. When the Indian rupee weakens against the US dollar, import costs rise, directly increasing domestic prices. Cultural and seasonal factors also play a role—demand for gold and silver surges during festivals and wedding seasons, pushing prices even higher.
In addition, limited domestic mining and disruptions in the global supply chain have constrained availability. With all these international and local factors converging, gold and silver prices in India are continuing their steep upward trend.