Bullion Breakout: Traders Bet Big as Gold Glitters Past Rs 10,000

In a dramatic turn of events, gold prices in India have surged past the Rs 10,000 per gram mark, driven by a potent mix of global economic uncertainty, a strengthening US dollar, and aggressive central bank buying. Traders now anticipate that the yellow metal could climb further to Rs 12,500 per gram by year-end, marking one of the most aggressive rallies in recent history.

 

Key highlights

 

- Gold hits Rs 10,005 per gram in Chennai, up from Rs 7,150 on January 1  

- Price of one sovereign (8 grams) now stands at Rs 80,040, up Rs 22,840 since January  

- Traders forecast a rise to Rs 12,500 per gram by December  

- US dollar surges to Rs 88, weakening the rupee and boosting gold demand  

- Central banks and BRICS nations continue heavy gold accumulation  

 

What’s driving the surge  

The rally is largely attributed to the following macroeconomic and geopolitical factors:

 

1. Dollar strength  

   - The US dollar has surged to Rs 88, making gold more expensive in rupee terms  

   - A 50 percent tariff imposed by the US government has intensified global trade tensions  

   - Investors are fleeing to safe-haven assets like gold amid currency volatility  

 

2. Central bank buying  

   - BRICS nations, including China and Russia, are converting reserves into gold  

   - This institutional demand has added sustained upward pressure on prices  

 

3. Geopolitical uncertainty  

   - Ongoing conflicts in Ukraine and the Gaza Strip have heightened risk aversion  

   - US policy unpredictability under President Donald Trump has further fueled safe-haven sentiment  

 

4. Domestic market dynamics  

   - Jewellery demand has softened due to high prices, with consumers shifting to lightweight designs  

   - Despite this, investment demand remains strong, especially in gold ETFs and futures  

 

Price trajectory and forecasts  

Gold prices have risen by nearly Rs 6,500 per 10 grams in just one month, with October futures on the Multi Commodity Exchange (MCX) touching Rs 1,07,740 per 10 grams. Analysts expect this bullish momentum to continue, supported by:

 

- Anticipated rate cuts by the US Federal Reserve  

- Continued rupee depreciation  

- Strong technical support levels around Rs 1,06,000 per 10 grams  

 

According to ICICI Bank’s Economic Research Group, gold could hover between Rs 99,500 and Rs 1,10,000 through the rest of 2025, with a potential spike to Rs 1,25,000 in early 2026. Traders in Chennai, however, are more optimistic, projecting Rs 12,500 per gram by December.

 

Impact on consumers and retailers  

Jewellers are recalibrating their offerings to adapt to the price surge. Making charges and craftsmanship premiums have pushed the cost of one sovereign of jewellery to Rs 95,000, with finer pieces crossing Rs 1 lakh. Retailers are witnessing a shift in consumer behavior:

 

- Preference for minimalist designs and lower weight categories  

- Increased interest in gold savings schemes and digital gold  

- Cautious buying ahead of the festive season  

 

Conclusion  

Gold’s meteoric rise to Rs 10,000 per gram is more than a market anomaly—it reflects deep-rooted global anxieties and strategic shifts in monetary policy. As traders brace for Rs 12,500 levels, investors and consumers alike are recalibrating their expectations. Whether this rally sustains or corrects will depend on the interplay of US policy, rupee stability, and geopolitical developments.

 

Sources: DT Next, MSN Money, Times of India, NDTV Profit