Sharp Rise in Domestic Gold Prices

On 13 October 2025, gold prices in India continued their upward trajectory, with 24-carat gold reaching ₹12,540 per gram, marking an increase of ₹32 from the previous day’s rate. Similarly, 22-carat gold was priced at ₹11,495 per gram (up ₹30), while 18-carat gold stood at ₹9,405 per gram (up ₹24).

The sustained surge reflects both international market movements and domestic economic adjustments, making gold one of the most watched commodities this festive season.

Global Factors Fueling the Rally

The rally in gold prices is largely influenced by global economic uncertainty and geopolitical tensions, which traditionally drive investors toward gold as a “safe haven” asset.

Recent volatility in major stock indices, concerns over slowing global growth, and high inflation across advanced economies have bolstered gold’s appeal.

Additionally, the US dollar’s fluctuation and expectations of a potential pause or rate cut by the US Federal Reserve have further boosted gold demand in international markets, pushing up global spot prices.

Domestic Influences and Rupee Depreciation

In India, domestic factors such as the depreciation of the rupee against the US dollar and festive-season demand have contributed to the price surge.

With the rupee trading weaker, the cost of importing gold — which India relies on heavily — has increased, directly impacting retail prices.

Moreover, the ongoing wedding and festival season, including Navratri and Diwali, has spurred consumer demand, especially for jewellery and gold coins, tightening supply in local markets.

Inflation and Safe Haven Investment

Gold often acts as a hedge against inflation, and rising consumer prices globally have encouraged investors to shift part of their portfolios to the yellow metal.

With inflation remaining above central bank targets in several countries, and crude oil prices adding to cost pressures, the investment demand for gold ETFs and bullion has seen an uptick.

In India, retail investors are increasingly turning to digital gold platforms and Sovereign Gold Bonds (SGBs) as convenient, secure investment avenues.

Impact on Economy and Policy

The sharp increase in gold prices has implications beyond consumer sentiment. India is the world’s second-largest gold importer, and rising prices could widen the current account deficit due to higher import bills.

For policymakers, this poses a challenge — balancing macroeconomic stability with festive demand. The government may also see a temporary dip in gold jewellery sales volumes as consumers delay purchases in anticipation of price corrections.

Outlook for Investors

Market analysts expect gold to remain volatile but firm in the near term. The outlook will depend on global monetary policy decisions, inflation trends, and the strength of the US dollar.

If the Federal Reserve maintains a cautious stance or signals further easing, gold prices could stay elevated. Conversely, a stronger dollar or easing tensions could trigger modest corrections.

Conclusion

The surge in gold prices to ₹12,540 per gram underscores the complex interplay between global uncertainty, currency movements, and domestic demand.

While high prices may strain consumers, they reaffirm gold’s enduring role as a symbol of financial security and a safe investment amid economic turbulence. For investors and policymakers alike, the trend calls for careful monitoring of both market stability and macroeconomic impact in the months ahead.