Despite gold price surge, jewellers upbeat on demand this Akshaya Tritiya
The relentless rally in gold continues with prices of the yellow metal touching the Rs 1 lakh per 10gm in the retail market. On the MCX, gold June 5 contract hit a high of Rs 99,358 per 10gm. The continued tariff-related tensions that have roiled global markets and fuelled concerns of a recession, apart from the rising differences between US President Donald Trump and Federal Reserve chairman Jerome Powell, has led to the surge in gold demand.
The safe haven asset has risen 28 per cent in the domestic market so far in 2025. The domestic price surge mirrors gold's rise in global markets, where prices have topped $3,400 an ounce.
"Gold price continues its upward trend driven by persistent safe haven buying, mainly due to weakening US dollar and escalating global trade concerns. The short-term outlook on gold will remain strong if trade tension escalates between the US and China," said Satish Dondapati, fund manager at Kotak Mahindra Asset Management Company.
The showdown between Trump and Powell has also added in to concerns. The US Fed had held interest rates steady last month, despite Trump's repeated calls for the central bank to cut interest rates to aid economic growth. Fed chairman Jerome Powell though has been concerned over the uncertain economic outlook amid the tariff rollout and its potential impact on inflation. On Monday Trump repeated his attacks, calling the Fed chairman "a major loser" for not cutting rates.
Amid the global volatility and uncertain outlook, central banks too have been stockpiling gold in a big way over the past year.
"Gold as a percent of reserves is the highest now since 2000 and has seen a meaningful increase since 2021. Since 2019, from 12 per cent it has climbed to more than 18 per cent in 2024," noted Anitha Rangan, economist at Equirus Securities.
The Reserve Bank of India too has been acccumulating gold. As of April 11, 2025, India's total foreign exchange reserves stood at $677.8 billion. The share of gold in India's forex reserves stood at around 11.8 per cent.
Goldman Sachs recently raised its gold price forecast again, now expecting gold to touch $3,700 per ounce by end-2025, compared with $3,300 forecast earlier. In the domestic market, Manav Modi, bullion analyst at Motilal Oswal Financial Services expects near-term gold to trade in Rs 96,500 to Rs 1,00,000 per ten gram range, assuming the rupee at Rs 85 to the US dollar. From a longer term perspective a level of Rs 1.06 lakh for gold could be possible, he said.
The surge in price towards the Rs 1 lakh mark comes around the period of Akshaya Tritiya, which for long has been considered highly auspicious for gold purchases. This year Akshaya Tritiya falls on April 30. Will the surge in gold price dent demand?
For now, jewellers remain hopeful that this year too retail demand will sustain. With expectations that prices will continue to rise, gold also becomes an investment vehicle in form of coins and bars among other things.
"Despite record high prices, we are seeing strong interest, particularly in gold bars, coins, and investment-grade jewellery," said Saurabh Gadgil, chairman and MD of PN Gadgil Jewellers.
He noted that consumers were also "actively" exchanging old gold using it to purchase new designs, while managing costs and maintaining liquidity.
"Gold continues to offer both emotional value and financial security, and in times like these, it stands tall as a resilient long-term investment," said Gadgil.
Typically, gold price witnesses a slight rise around festive season like Akshaya Tritiya, in reflection to the spike in demand, pointed Colin Shah, MD of Kama Jewellery.
"The sentimental and cultural value attached towards investing in yellow metal on auspicious occasions like this will keep the demand upbeat, irrespective of the price trend," he said.
Shah expects gold to breach $3,600 an ounce in international markets in the current financial year ending March 2026.
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