Gold prices in India have hit new highs ahead of Dhanteras, reaching ₹81,400 per 10 grams in major cities like New Delhi, fueled by strong demand from jewellers and consumers celebrating the festival season. Dhanteras, marking the start of Diwali, traditionally sees a surge in purchases of gold and silver as they symbolize prosperity and good fortune. This year, however, buyers face gold prices that are hovering near record levels, posing a dilemma for consumers torn between tradition and price sensitivity.
Despite the high prices, the cultural and investment appeal of gold remains strong, with increased interest also observed in silver, which has become an alternative for those priced out of the gold market. Silver saw a price increase of ₹200, climbing to ₹99,700 per kilogram, with silver coins becoming especially popular. Many families are opting for silver purchases, which are seen as a more accessible choice, especially among younger buyers and those observing the rise in prices.
Drivers of Price Surge and Market Impact
Global economic uncertainties and geopolitical issues, including ongoing conflicts, have contributed significantly to gold’s role as a ‘safe-haven’ investment, driving up prices. Additionally, recent reductions in customs duties from 15% to 6% provided some relief, though experts predict the demand volume may still fall slightly compared to previous years. The value of gold and silver sales during Dhanteras, however, is anticipated to increase by 12–15%, boosted by price levels that attract both traditional buyers and investors.
Geopolitical Tensions and Interest Rates: Rising interest rates in the U.S. and economic uncertainty have further bolstered gold’s standing as an inflation hedge. As global inflation concerns continue, central banks worldwide are tightening their monetary policies, which indirectly supports the price of gold. Political instability in several regions has also strengthened gold’s investment appeal, as people look for assets that hold value during times of crisis.
Shifting Buyer Preferences and Digital Gold
Industry experts are also noting a shift toward digital gold as it offers convenience, security, and easy storage compared to physical gold. Platforms for digital gold purchases have expanded, making it an accessible investment, particularly for younger demographics or urban buyers who may prefer a hassle-free experience. During Dhanteras, many consumers are gifting digital gold as an alternative to jewelry or coins, while also investing in small amounts for long-term security.
Rural Sector and Wedding Season to Boost Sales
The rural sector in India is also playing a significant role in sustaining demand. A favorable monsoon season has positively impacted rural incomes, giving an expected boost to spending during the festival. Moreover, with over 40 lakh weddings expected to take place post-Diwali, gold demand is projected to remain strong through the winter. Rural buyers, with traditionally higher attachment to gold for weddings and gifts, are anticipated to drive sales, compensating for some price-sensitive urban buyers who may limit their purchases.
For those with a long-term investment outlook, experts suggest that even at high prices, gold remains an ideal option due to its stability and value appreciation over time. The demand for gold as a store of wealth, particularly in physical forms like jewelry or bullion, continues to appeal across generations, underscoring the asset’s role in wealth preservation.
Industry Outlook: Future of Gold and Silver Investments
The upcoming months will be a test for the jewelry sector, balancing high prices with demand cycles tied to cultural traditions and financial planning. Analysts expect gold prices to remain high, but silver may present an attractive alternative for investors, given its dual demand as an industrial metal. Some experts believe that silver’s versatility and lower price point make it an ideal entry point for new investors.
In conclusion, this Dhanteras season reflects the adaptability of Indian consumers who navigate high prices through digital purchases, selective buying, and alternative metals. While gold prices remain steep, the strong emotional and cultural value associated with the metal keeps demand resilient, solidifying its place as an investment and a symbol of prosperity in Indian households.
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