Why Gold Prices Are Skyrocketing in India: A Simple Guide

If you’ve walked by a jewellery shop or checked gold prices lately, you might have noticed something shocking: gold is more expensive than ever! In 2025, gold prices in India have climbed to record highs, crossing ₹98,000 per 10 grams in some markets and even hitting ₹1 lakh with taxes. But why is this happening? Let’s break it down in a way that’s easy to understand.

1. Gold Is a “Safe” Choice When the World Feels Risky

Gold is like a trusted friend during tough times. When the world feels uncertain—think wars, trade fights, or economic problems—people buy gold because it holds its value. Right now, there’s a lot of global tension:

• The US and China are in a big trade war, slapping high taxes on each other’s goods.
• Conflicts like the Russia-Ukraine war and trouble in the Middle East are making people nervous. When things look shaky, investors and even governments turn to gold, pushing its price up.

2. The US Dollar Is Weak, and That Helps Gold

Gold prices are set in US dollars globally. When the dollar gets weaker, gold becomes cheaper for people using other currencies, like the Indian rupee. This means more people buy gold, and the price goes up. In 2025, the US dollar has been losing strength, partly because the US might lower interest rates. Lower rates make gold more attractive than saving money in banks, so demand for gold is soaring.

3. Banks Are Hoarding Gold

Big banks, like India’s Reserve Bank of India (RBI), are buying tons of gold—72 tonnes in 2024 alone! Why? They want to keep their money safe from currency ups and downs. Other countries, like China, are doing the same. When banks buy so much gold, there’s less of it available in the market, and that drives prices higher.

4. Indians Love Gold, Especially Now

In India, gold isn’t just jewellery—it’s a symbol of wealth and tradition. During festivals like Diwali or wedding seasons, people buy gold for gifts or investments. Even though prices are high, this demand stays strong. Plus, in 2024, the government lowered taxes on gold imports (from 15% to 6%), making it a bit cheaper to bring gold into India. This has led to more buying, which pushes prices up further.

5. Gold Protects Against Rising Prices

Have you noticed things like food or fuel getting more expensive? That’s inflation, and it’s a big reason people buy gold. Gold tends to hold its value when other things get pricier. With inflation worries in India and globally, more people are investing in gold to protect their money, driving demand and prices higher.

6. Investors Are Jumping In

It’s not just jewellery buyers—investors are pouring money into gold too. In 2025, Indian gold exchange-traded funds (ETFs), which are like gold investments you can buy like stocks, saw billions of rupees in new money. When investors bet big on gold, it adds to the price surge.

7. There’s Only So Much Gold

Gold isn’t like vegetables that grow every season. It’s rare, and mining more takes time. With so many people and banks wanting gold, there’s not enough to go around. This scarcity makes gold even more expensive.

What’s Happening to Prices?

In April 2025, gold prices in India are around ₹93,940 per 10 grams on the market, but with taxes, you might pay over ₹1 lakh in shops. That’s a huge jump—prices are up 23–32% this year alone! Globally, gold is also at record highs, around $3,263 per ounce.

Will Prices Keep Going Up?

Some experts think gold could hit ₹95,000–₹97,000 per 10 grams by the end of 2025. If global problems worsen or the rupee weakens, prices might climb even higher, maybe touching ₹1 lakh without taxes in 2026. But there’s a catch: if things calm down globally or the US dollar gets stronger, prices could dip a bit.

Should You Buy Gold Now?

High prices are making some people think twice about buying gold jewellery—sales have dropped in some shops because it’s so costly. Others are selling old gold to cash in. If you’re thinking of buying, here are a few tips:

• For jewellery: Wait for a price dip if you can, but don’t expect a big drop soon.
• For investment: Gold is still a good way to protect your money, especially with all the uncertainty. Consider gold ETFs or coins if jewellery feels too expensive.
• Stay updated: Watch news about global events or the US dollar—they affect gold prices.

The Bottom Line

Gold prices are soaring in India because of global fears, a weaker US dollar, strong demand from buyers and banks, and gold’s role as a safe investment. It’s a mix of world events and India’s love for gold that’s driving this boom. While prices might feel scary, gold remains a trusted choice for many. Whether you’re buying for a wedding or to save for the future, keep an eye on the market and make smart choices.

Disclaimer: This article is for information only. Always consult a financial advisor before making investment decisions.