Gold Price Crosses Rs 1 Lakh Per 10 Gram; What Is Behind This Skyrocketing?
Gold prices have been surging unprecedently in the Indian market over the past few months, triggering worries among families given the significant role of gold jewelry in the household and weddings traditions in the country. On Tuesday, April 22, the gold price crossed Rs 1 lakh per 10 grams for the first time, following the latest hike of Rs 275 for a gram and Rs 2200 for a sovereign recently.
With this, one has to pay Rs 74,320 for a sovereign of gold and Rs 9,290 for a gram marking the latest jump as the biggest surge in recent times. Notably, the international gold price has also increased by $560 in the past 12 days. There are indications that it will surge past $3,500 soon, according to Abdul Nazar, the general secretary of the All Kerala Gold & Silver Merchants Association (AKGSMA).
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The international gold price is $3485 and the rupee exchange rate is 85.13. The bank rate per kilogram for 24-carat gold has reached over Rs 1 crore, Nazar added in a statement issued by the gold and silver merchant body in the state.
Why Gold Price Is Skyrocketing
Many people wonder why gold prices are skyrocketing more than ever before, despite reports that the prices will climb down soon. A US-based Morningstar analyst, John Mill, recently forecasted a sharp decline – a 38% drop – in gold prices in the next few years. In tune with the prediction, the Indian media had calculated that a potential decline of nearly 40% would bring down the price to around Rs 55,000 per 10 grams in India.
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However, contrary to the prediction, the gold price continues to climb the sky ladder, benefiting investors while straining consumers. One of the major reasons behind the upward drive of the gold price is the economic uncertainty due to the trade war declared by US President Donald Trump. China’s reciprocal measures threatening other countries against surrendering to US intimidation further fueled the geopolitical tensions, causing gold price to hike and raising safe-haven demand.
The increasing geopolitical tension, the weakening of the dollar, and inflation concerns has induced a potential safe-heaven demand for gold, contributing to the soaring gold price.
