Gold Crosses ₹1 Lakh Mark: What’s Driving the Rally in India’s Commodity Market?
Gold Prices Hit Historic High in India Commodity Market
In a historic move, gold prices in India have surged beyond ₹1 lakh per 10 grams, sending shockwaves through the commodity and retail investment markets. As of August 13, 2025, gold futures on the Multi Commodity Exchange (MCX) touched ₹1,02,191 before settling slightly lower.
This milestone has sparked widespread debate among traders, investors, and economists: is this a temporary spike or the beginning of a longer-term uptrend?
What’s Fueling This Gold Rally?
1. Global Trade Tensions and Safe-Haven Demand
Renewed trade tensions between the U.S. and China have created uncertainty across global markets. Tariff announcements and diplomatic strain have led investors to seek safe assets—gold being the top choice.
Historically, gold performs well during periods of geopolitical tension, and the current situation is no exception. Rising global uncertainty has triggered a fresh wave of gold buying.
2. Weakening Rupee Against Dollar
The Indian rupee has been under pressure for weeks, recently touching a nine-month low against the U.S. dollar. A weaker rupee makes gold imports more expensive, directly impacting domestic prices. Since India imports most of its gold, the currency effect cannot be ignored.
3. Shift in Consumer Behavior
Interestingly, while prices are rising, physical demand is slowing down. The World Gold Council recently reported that gold consumption in India may hit a five-year low this year, particularly for jewellery. However, investment demand—for ETFs, sovereign gold bonds, and digital gold—has grown steadily.
How Are Key Sectors Reacting?
Jewellery Industry Feeling the Heat
Major jewellers like Titan have reported strong revenue numbers, but not necessarily due to higher volumes. Their Q1 net profit rose by over 50%, driven largely by high gold prices and strong performance in watches and other segments.
However, customer footfall has remained flat. Most buyers are switching to lighter jewellery or postponing purchases altogether. The wedding jewellery segment, traditionally a stronghold, has been notably affected.
Imports Drop, Digital Gold Sees Uptick
According to government data, India’s gold imports dropped 40% year-on-year in June, reaching their lowest levels since early 2023. The surge in price has made bulk purchasing less attractive for jewellers and dealers.
At the same time, platforms offering digital gold and gold-backed ETFs are witnessing increased traffic and higher transactions.
- City-Wise Price Breakdown (August 13, 2025)
| (per 10g) | (per 10g) | |
| City | 24K Gold | 22K Gold |
| Mumbai | ₹1,01,500 | ₹93,100 |
Delhi | ₹1,02,300 | ₹94,000 |
Ahmedabad | ₹1,04,300 | ₹95,700 |
Chennai | ₹1,01,800 | ₹93,600 |
| Kolkata | ₹1,02,000 | ₹93,800 |
Source: Economic Times – Gold Price Tracker
Should You Invest in Gold Right Now?
This is the big question on every investor’s mind.
According to commodity analysts at Kotak Securities and Motilal Oswal, gold may still have room to rise, especially if global uncertainties continue. However, they caution retail investors against buying at peak levels without proper risk planning.
Best Investment Routes for Now:
Gold ETFs: Low cost, no storage issues, SEBI-regulated
Sovereign Gold Bonds: Backed by the government, pays 2.5% annual interest
Digital Gold: Instant transactions, better liquidity
Avoid impulsive purchases of physical gold, especially when premiums are high.
Expert Opinion: Will Gold Go Higher?
“Gold has already priced in a lot of global uncertainty, but if the rupee weakens further or the U.S.–China situation escalates, we could see another leg higher,”
— Naveen Mathur, Head of Commodities, Anand Rathi
Meanwhile, traders are watching key technical levels closely. If gold sustains above ₹1,00,000 for a few more sessions, new support may be formed, possibly leading to ₹1,05,000 targets in the short term.
Final Thoughts
Gold’s recent surge isn’t just about numbers—it’s a reflection of how global events, currency dynamics, and investor psychology interact in real time. For Indian investors, this is a moment to observe the market carefully, diversify their portfolios, and avoid overexposure to any single asset.
While gold continues to shine, smart investing is all about balance.
