The shine of precious metals has suddenly increased in the domestic and international bullion market. A huge jump has been recorded in the prices of gold and silver during the trading sessions of the last one week. While gold has become costlier by about ₹ 7,960 per 10 grams in the Multi Commodity Exchange (MCX) and local spot markets within a week, silver prices have also seen a jump of more than ₹ 10,000 per kg due to industrial demand and safe haven inflows. This huge surge, which came just ahead of weddings and shopping for the upcoming festive season, has affected the budgets of retail buyers.
Big change in weekly prices of gold and silver
According to bullion market data, this big difference has been recorded in the futures and spot markets of gold and silver on weekly level:
| metal/category | Pre level (beginning of the week) | Fresh Level (Weekend Closed) | total weekly change |
| 24K gold (per 10 grams) | ₹1,54,400 | ₹1,62,360 – ₹1,62,438 | +₹7,960 to +₹8,000 |
| 22K gold (per 10 grams) | ₹1,41,500 | ₹1,48,800 – ₹1,49,650 | +₹7,300 |
| Silver (per 1 kilogram) | ₹2,35,000 | ₹2,45,000 – ₹2,48,120 | +₹10,000 to +₹10,670 |
Why was there such a sudden rise in the bullion market?
According to commodity and financial market experts, the major global and economic factors responsible for this sharp rise in gold and silver are:
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Fall in US Dollar and Bond Yields: Due to weakness in the US Dollar Index (DXY) and fall in US Treasury yields, there has been a huge increase in demand for non-yielding assets such as gold globally.
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US Treasury’s bond buyback plan: The decision by the US Treasury Department to double long-dated bond buybacks has raised concerns of currency debasement in international markets, causing investors to increasingly turn to bullion.
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Geopolitical tensions and crude oil movements: Due to rising geopolitical tensions in the Middle East and rising crude oil prices, global investors are considering gold as the safest option for portfolio hedging.
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Heavy purchase of gold by central banks: Major central banks around the world are continuously increasing gold reserves in their foreign exchange reserves, due to which the demand for physical gold remains strong in the market.
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Strong Industrial Consumption of Silver: Due to huge industrial demand for silver in green energy, solar panels and electronics sectors, both speculation and investment in the white metal have increased.
Important advice for retail buyers and investors
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Hallmarking check: While buying gold jewellery, it is mandatory to check the 6 digit HUID (Hallmark Unique Identification) code.
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Making Charges and Taxes: The final price of jewelery includes 3% GST and making charges, so it would be wise to compare between different jewelers before purchasing.
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Digital Gold and ETF: If your objective is only investment, then Gold ETFs or Sovereign Gold Bonds (SGB) can be better options instead of physical gold where there are no storage and making charges.
