In an unprecedented development that has sent ripples across financial markets, gold prices in India have breached the psychological barrier of Rs 1,00,000 per 10 grams, reflecting a significant surge in the value of the precious metal amid mounting global economic and geopolitical uncertainties.
This is the first time in India’s history that gold has reached such heights, further reinforcing its reputation as a time-tested safe-haven asset.
On Tuesday, the price of 24-karat gold (999 purity) touched Rs 1,00,000 per 10 grams in the Mumbai bullion market, while 22-karat gold — commonly used in jewellery — was quoted at Rs 91,600 per 10 grams.
The rally comes amid sharp gains in international gold markets, where global gold prices have skyrocketed, crossing $3,400 per troy ounce, and currently trading around $3,486.85 in New York.
Trump’s Fed Overhaul Plan and Its Ripple Effect
The sharp uptick in gold prices was catalyzed by US President Donald Trump’s announcement of an ambitious plan to restructure the Federal Reserve, a move that has created widespread speculation and anxiety in global markets.
This announcement, along with ongoing trade tensions and potential tariff expansions, has unsettled investors and prompted them to seek refuge in safer assets like gold.
Trump has publicly criticized Federal Reserve Chairman Jerome Powell for failing to cut interest rates, even as the US dollar continues to weaken in global currency markets.
This tension has contributed to speculation that a major shift in US monetary policy may be imminent, leading to increased inflation expectations and higher future interest rates — both of which are traditionally bullish for gold.
Global Economic Jitters and Gold’s Safe Haven Appeal
The surge in gold prices comes at a time of increasing volatility in global financial markets, driven by tariff wars, currency fluctuations, and mounting geopolitical tensions, particularly the escalating conflict in Ukraine and uncertainties in the Middle East.
These developments are making investors increasingly risk-averse, pushing them toward gold, which is widely viewed as a hedge against inflation and geopolitical turmoil.
Adding to the anxiety is the Federal Reserve’s warning that an expanding tariff regime could severely undermine its core mandate of maintaining price stability and achieving maximum employment.
This has only added fuel to the ongoing flight to safety, as more investors seek the relative security of precious metals.
Massive Returns Since 2024
Since March 2024, gold has appreciated by nearly 59%, marking one of its strongest performances in recent history. The upward trend has been bolstered by a weaker US dollar, which makes gold cheaper for buyers using other currencies, thus boosting global demand.
The gold rally is also being propelled by strong demand from global central banks, particularly China, as well as institutional investors looking to diversify their portfolios amid fears of a looming US debt crisis.
According to Jateen Trivedi, senior research analyst at LKP Securities, these factors — along with uncertainty surrounding the US economic outlook and concerns about future monetary policy direction — are playing a critical role in the current gold price surge.
Trivedi emphasized that the gold market is being strongly supported by a “perfect storm” of macroeconomic and geopolitical concerns: escalating tariff tensions, persistent inflationary pressures, and strategic buying by key players in the global financial ecosystem.
Outlook Ahead
As the global economy braces for potential shifts in US monetary policy, including a possible revamp of the Federal Reserve’s leadership and objectives, gold is likely to remain a preferred asset class among cautious investors.
The ongoing narrative of economic instability, inflation, and geopolitical friction is expected to support elevated prices for the foreseeable future.
For Indian investors and consumers, particularly those in the jewellery market, the rising cost of gold presents both a challenge and an opportunity — a hedge against currency depreciation and inflation, but also a potential barrier for those looking to make big-ticket purchases.
As international uncertainty continues to loom large, gold’s glitter only seems to be getting brighter, reaffirming its enduring value in times of global unease.
