As of February 7, 2025, gold prices in India have reached unprecedented levels, reflecting both global economic trends and domestic market dynamics. The price of 24-carat gold stands at ₹86,693 per 10 grams in Delhi, while 22-carat gold is priced at ₹79,483 per 10 grams.
This surge represents a significant increase from previous years, with gold prices experiencing over 26% growth in 2024 alone.
Factors Driving the Surge in Gold Prices
Several key factors have contributed to the remarkable rise in gold prices in India:
- Global Economic Uncertainty: Ongoing geopolitical tensions, particularly in regions like Ukraine and the Middle East, have led investor to seek safe-haven assets, with gold being a preferred choice.
- Central Bank Policies: Major central banks have continued to purchase gold, albeit in lesser quantities than in 2024, influencing global gold prices.
- Currency Depreciation: The depreciation of the Indian Rupee against the US Dollar has made gold more expensive in the domestic market, contributing to the price surge.
- Inflationary Pressures: Rising inflation rates have led investors to turn to gold as a hedge against currency devaluation, further driving up demand and prices.
Impact on Gold Demand in India
Despite the soaring prices, the World Gold Council (WGC) anticipates that India’s gold consumption in 2025 will moderate from the previous year’s nine-year peak. The WGC projects demand to be between 700 and 800 metric tons, slightly below the 802.8 tons recorded in 2024.
This moderation is primarily attributed to reduced demand for jewelry due to higher prices, although investment demand remains robust.
Investment Demand Remains Strong
Investment demand for gold in India has shown resilience amid rising prices. In 2024, investment demand surged by 29% to an 11-year high of 239.4 tons.
This trend is expected to continue in 2025, with retail investors showing growing interest in gold ETFs, digital gold, and physical forms like coins and bars.
Future Outlook for Gold Prices
Analysts remain optimistic about the trajectory of gold prices in 2025. Brokerage firm Axis Securities predicts that gold prices could reach a new all-time high, targeting ₹83,000 per 10 grams.
This forecast is based on factors such as global economic uncertainties, central bank policies, and potential further depreciation of the Indian Rupee.
Conclusion
The gold market in India is experiencing a period of significant growth, driven by a combination of global and domestic factors
While high prices may temper jewelry demand, investment interest remains strong, suggesting that gold will continue to play a vital role in India’s economic landscape throughout 2025.
