Precious metals in Ahmedabad scaled unprecedented peaks on Tuesday, with gold and silver prices setting new all-time records. The surge mirrored a powerful rally in global markets, fueled by anticipations of a softer US monetary policy and consistent buying by central banks worldwide.
Historic Price Milestones for Gold and Silver
The price of 99.9% pure gold in the city leaped to Rs 1,40,500 per 10 grams on Tuesday. This marked a sharp rise from approximately Rs 1.38 lakh per 10 grams recorded just a day earlier, on Monday. The scale of the annual increase is staggering: from Rs 79,200 per 10 grams on January 1, 2025, prices have climbed by Rs 61,300, representing a jump of 77.3% so far this year.
Silver continued its impressive run for the second day in a row. The white metal surged by Rs 3,000 to achieve a fresh historic high of Rs 2,18,000 per kilogram (all taxes included), up from Rs 2,14,000 per kg. Since the beginning of the calendar year, silver has appreciated by nearly 150% from its starting point of Rs 86,500 per kg.
Global Drivers and Market Sentiment
Internationally, spot gold was trading just above the $4,486-per-ounce mark on Tuesday. This reflected a daily gain of 0.96% and a weekly increase of 4.28%, bringing it tantalizingly close to the key psychological barrier of $4,500. On the domestic futures platform, gold had previously peaked at Rs 1,36,744 on the MCX on December 22, as noted by Haresh Acharya, director of the India Bullion and Jewellers' Association.
Acharya explained the underlying causes of the rally. "The latest round of rallies is being driven by expectations that the Federal Reserve will deliver more than one rate cut in 2026, along with rising geopolitical tensions that are strengthening the safe-haven appeal of gold and silver," he stated. This combination of factors is drawing significant investment into bullion.
Retail Demand Cools Amid Soaring Prices
Despite the record-setting prices, consumer demand at the retail level remains subdued. Jigar Soni, President of the Jewellers' Association of Ahmedabad, indicated that the current market activity is largely driven by bullion trading rather than robust retail buying, which is now mostly confined to essential wedding-related purchases.
"Even wedding jewellery purchases are increasingly in 14 or 18 carat, as consumers turn cautious at these elevated levels; and a majority of purchases are taking place by exchanging old gold. For diamond jewellery, lab-grown diamonds are preferred," Soni observed. This shift highlights how high prices are altering consumer behavior, pushing them towards lower purity gold and alternative materials to manage costs.
The Ahmedabad bullion market now watches closely to see if global factors will sustain this meteoric rise or if a correction is on the horizon, even as investors continue to flock to the safety of precious metals.
