The price of 24-carat gold surged to Rs 1 lakh per 10 grams for the first time in India | Current Affairs | Vision IAS
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The price of 24-carat gold surged to Rs 1 lakh per 10 grams for the first time in India

Posted 23 Apr 2025

2 min read

Key Global Factors Driving Price Surge

  • Geopolitical Tensions: Rising global conflicts and economic uncertainties have led investors to flock to gold, which is seen as a safe-haven asset.
  • US Federal Reserve Rate Cuts: With falling interest rates, the appeal of gold increases. As a non-yielding asset, gold becomes more attractive when the opportunity cost of holding cash or bonds drops. 
  • Weakening of the US Dollar: A declining dollar makes gold cheaper for buyers using other currencies, thereby boosting demand.
  • Central Bank Accumulation: Central banks, especially in Asia, are aggressively purchasing gold to reduce dependency on the US dollar and diversify reserves.

India’s Gold Market 

  • India is the world’s 2nd largest consumer of gold, just after China. In 2024, India's gold demand reached 802.8 tonnes.
  • Approximately 85% of India’s gold is imported, making domestic prices highly sensitive to international trends.

Reasons for High Gold Demand in India

  • Financial Security: Gold is trusted as a long-term store of value, especially during inflation or market instability.
  • Cultural & Religious Significance: Gold is considered auspicious and forms an essential part of festivals like Diwali, Dhanteras, and Akshaya Tritiya.
  • Wedding Season Boost: Gold purchases spike during wedding season, with jewelry being a traditional and prestigious gift for brides.
  • In rural many people lack access to banks/stock markets. For them, gold serves as a trusted and liquid asset for saving, investing, or even borrowing.

Gold Reserves          

India 

  • Gold Ore: The largest resources in terms of gold ore (primary) are located in Bihar (43%), followed by Rajasthan (24.92%), and Karnataka (20%). 
  • Metal Content: In terms of metal content, Karnataka remained on top, followed by Rajasthan, Andhra Pradesh, and Bihar.

World 

  • Major Holders of Gold Reserves: United States, followed by Germany and Italy.
  • Major Exporters: Germany, followed by the European Union and Switzerland (World Integrated Trade Solution, 2023). 
  • Tags :
  • Gold
  • Gold Prices
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