Gold and silver prices created history in the Indian bullion market on Friday, surging to their highest-ever levels and triggering concern among consumers. Soon after trading began on the Multi Commodity Exchange (MCX), precious metal prices witnessed a sharp rally.
In Hyderabad, the price of gold touched an all-time high of ₹1.4 lakh per pound for the first time. Silver prices also shocked the market by climbing to a lifetime peak of ₹2.4 lakh per kilogram. While investors welcomed the rally, middle-class buyers remained worried due to rising costs.
Why Prices Are Rising
Several global factors are driving this historic surge. Strong expectations that the US Federal Reserve may cut interest rates in 2026 have boosted demand for gold, as investors prefer non-interest-bearing assets during low-rate cycles. In addition, geopolitical tensions such as the Russia–Ukraine war, US–Venezuela issues, and US military actions in Nigeria have increased demand for gold as a safe-haven asset. A weakening US dollar has further supported the rally.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, said that growing geopolitical uncertainty and rate-cut expectations pushed global gold prices to $4,500 per ounce on Friday.
Retail Market Feels the Heat
The sharp rise in prices has severely impacted retail demand. Former Gem and Jewellery Domestic Council chairman Anantha Padmanabhan said jewellery sales dropped by over 50 percent in the last 15 days. He noted that even during the festive season and NRI visits, market activity remained weak.
Ahmedabad Jewellers Association president Jigar Soni said consumers are opting for 14 or 18-carat gold instead of 22-carat. Many buyers are also choosing to exchange old gold rather than purchase new jewellery.
Silver Outpaces Gold
Silver prices rose faster than gold due to strong industrial demand. Growing usage in electric vehicles, solar panels, and AI hardware has created a supply deficit for the fourth consecutive year. Globally, silver prices have jumped nearly 158 percent this year.
What Lies Ahead
Market experts expect the rally to continue. Analysts predict gold may reach ₹1.5 lakh per pound and silver ₹2.5 lakh per kilogram in the coming months. However, they caution that short-term corrections of 10–15 percent remain possible.
