Gold breaks ₹1 lakh barrier for first time as global turmoil fuels surge

In a historic first, gold prices in India have crossed the ₹1 lakh mark per 10 grams, driven by a confluence of global economic jitters, a weakening US dollar, and mounting geopolitical tensions. The domestic rally mirrors a sharp spike in global rates, with gold breaching $3,400 per ounce, and touching $3,486.85 in New York trading on April 20.

In Mumbai's bullion market, 24-karat gold was quoted at ₹1,00,000 per 10 grams, while 22-karat gold reached ₹91,600. This unprecedented rise follows US President Donald Trump's controversial announcement to overhaul the Federal Reserve — an aggressive move that has shaken investor confidence and heightened global financial uncertainty.

Why is gold skyrocketing?

Gold, long considered a safe-haven asset, is benefiting from a surge in demand amid increasing market volatility. The yellow metal has appreciated nearly 59% since March 2024. A major contributor to this rally is the weakening US dollar, which has plunged to a three-year low. As gold becomes cheaper for holders of other currencies, global demand has accelerated.

President Trump's escalating criticism of Federal Reserve Chair Jerome Powell—accusing him of failing to slash interest rates—has further rattled markets. Trump's rhetoric, coupled with fears of inflation and a looming US debt crisis, is intensifying concerns over the Fed’s independence and decision-making credibility.

“The uncertainty over monetary policy and Trump’s intention to sack Powell have caused a massive flight to safety. The dollar is sliding, and gold is the natural beneficiary,” said NS Ramaswamy, head of commodities at Ventura Securities.

Global and domestic drivers

According to Jateen Trivedi, research analyst at LKP Securities, “The rally is supported by tariff tensions, inflationary fears, and strong institutional demand, especially from central banks like China’s.” Geopolitical stress, particularly on the Russia-Ukraine front, is also adding fuel to the fire, pushing investors to flock to safer assets.

In addition to global demand, India’s own deep-rooted cultural and economic connection with gold has amplified the domestic price rise. India is the second-largest consumer of gold after China, with a demand of 802.8 tonnes in 2024, up from 761 tonnes the previous year, according to the World Gold Council.

Gold’s role as a financial buffer during personal crises continues to grow. With rising inflation and slowing economic growth, more Indians are pledging gold for loans. The increasing adoption of fintech platforms has made gold loans more accessible, especially in rural and semi-urban areas, contributing to the yellow metal's growing utility beyond tradition.

What lies ahead?

As global markets continue to reel under economic and political pressure, gold’s status as a hedge against uncertainty remains unchallenged. With the Fed’s future path unclear, Trump’s policy shocks ongoing, and inflation concerns lingering, analysts suggest that gold may continue to shine brighter in the near term.