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Kolkata: Gold prices have again surged back to the Rs 1 lakh/10 gm level, a northward march attributed to the uncertainty created by 25% retaliatory tariffs slapped on India by US President Donald Trump. On Monday, January 4, the opening price of Gold 999 was Rs 99,759 at the opening of trade and reached Rs 1,00,167 at close according to IBJA (India Bullion and Jewellers Association) data. Gold 995 prices were Rs 99,360 and Rs 99,766 respectively.
Analysts point out that "999 gold" refers to gold with a purity of 99.9%, while 995 fineness is considered as standard gold, which is used for trading purposes on MCX and in international trading. Since gold is traditionally considered all over the world a safe haven asset, the demand for the metal rises when there is uncertainty -- economic or geo-political -- in the air.
World Gold Council has said last week that gold consumption in India is likely to reach a five-year low, thanks to the continuous elevated levels of the price of the yellow metal. In India gold jewellery is in high demand and the prices have dented the sales of gold jewellery. India is the second biggest consumer of gold after China and the country imports a lot of gold every year. In fact, the precious metal is the second biggest item in the import bill of India after crude oil.
World Gold Council officials have told the media that while the demand for gold in India stood at 802.8 tonnes in 2024, it could dip to anything between 600 and 700 tonnes this year. If prices stabilise, the demand could reach 700 tonnes but if prices remain elevated it could fall closer to 600 tonnes.
The peak season for gold jewellery is during the festive and wedding season, which usually stretches from August to December/January. Diwali and Dhanteras are the peak occasions for buying gold, supported by long-standing tradition.
WCG data show that the country's consumption of gold was recorded at 134.9 tonnes in Q1 of FY26, a decline of 10% compared to what it was last year. The demand from the jewellery sector fell by a huge 17%, but a rise of 7% during the quarter from the investment domain. The demand for the metal is expected to fall to much lower levels compared to 248.3 tonnes, the demand recorded last year during the July-September period.
The buoyancy in gold prices have led investment experts recommend that a retail investor to invest 10-15% of his/her portfolio in gold/gold denominated assets such as gold ETFs. AMFI (Association of Mutual Funds in India) data show that gold ETFs have attracted a gross inflow of Rs 2,081 crores, which is the highest in the past five months.
(Disclaimer: (Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.))
