On December 22, both gold and silver prices soared to new all-time highs for the second consecutive day, while according to data from the India Bullion and Jewelers Association (IBJA), gold prices witnessed a significant jump of ₹2,163, reaching ₹1,36,133 per 10 grams. This marks a substantial increase from its previous closing price of ₹1,33,970 on Monday. Similarly, silver prices also experienced a remarkable surge, with one kilogram of silver climbing by ₹1,523 to an unprecedented ₹2,09,250 per kg, while its price on Monday was ₹2,07,727 per kg, indicating a rapid upward trend in the precious metals market.
Daily and Annual Price Movements Analyzed
Silver prices have seen an astonishing increase of ₹23,762 over the past ten days, rising from ₹1,85,488 per kg on December 10. This year alone, the price of gold has escalated by ₹59,971, while on December 31, 2024, 10 grams of 24-carat gold were priced at ₹76,162, which has now surged to ₹1,36,133. Silver prices have also witnessed a substantial increase of ₹1,23,233 during the same period. On December 31, 2024, one kilogram of silver was valued at ₹86,017, now reaching ₹2,09,250 per kg. It's important to note that IBJA's quoted prices don't include 3% GST, making charges, or the jeweler's margin, which explains why actual rates may vary across cities. These rates are utilized by the Reserve Bank of India (RBI) to determine the. Rates for Sovereign Gold Bonds and by various banks for setting gold loan rates.
Key Drivers Behind Gold's Price Surge
Several global and economic factors are contributing to this unprecedented rise in gold prices. The primary reason is the weakening of the US dollar. The anticipation of interest rate cuts by the United States has led to a weaker dollar, which in turn reduces the holding cost of gold, making it more attractive for investors. The second significant factor is geopolitical tensions. Ongoing conflicts like the Russia-Ukraine war and increasing global instability are prompting investors to view gold as the safest investment haven, thereby boosting its demand. The third major reason is the substantial gold purchases by central banks worldwide. Countries like China are aggressively accumulating gold for their reserves,. With purchases exceeding 900 tons annually, pushing global gold prices upwards.
Major Factors Fueling Silver's Rally
The surge in silver prices isn't solely driven by investment demand but also Notably by its industrial applications. Silver is no longer confined to jewelry; it has become an essential raw material with heavy usage in industries such as solar panels, electronics, and electric vehicles (EVs), while another contributing factor is the fear of potential tariffs imposed by former US President Donald Trump. This apprehension has led US companies to stockpile large quantities of silver, creating a shortage in global supply and driving prices higher. Also, manufacturers are in a race to secure supplies, fearing production halts. This preemptive buying is expected to sustain the upward trend in silver prices in the coming months.
Ajay Kedia, Director of Kedia Advisory, has provided significant forecasts regarding the future prices of gold and silver. He suggests that the demand for silver is currently strong and is expected to remain so. Consequently, silver could reach ₹2. 50 lakh per kg within the next year, while by the end of this year, silver prices are projected to hit ₹2. 10 lakh per kg. Regarding gold, its demand also remains solid. According to Ajay Kedia, gold could surpass ₹1. 50 lakh per 10 grams by next year. By the end of this year, its price is estimated to reach ₹1. 35 lakh per kg, providing crucial insights for both investors and consumers.
**Expert Predictions: What Lies Ahead for Precious Metals?
Essential Tips for Buying Gold
When purchasing gold, consumers should keep several important points in mind to ensure they acquire genuine and pure gold. Firstly, always buy certified gold with a Bureau of Indian Standards (BIS) hallmark, while this hallmark is alphanumeric, such as AZ4524, and indicates the purity (caratage) of the gold. Secondly, cross-check the correct weight of the gold and its price on the day. Of purchase from multiple reliable sources, such as the India Bullion and Jewelers Association website. It's crucial to remember that gold prices vary based on its caratage (24-carat, 22-carat, and 18-carat), so choose the appropriate caratage according to your needs and verify its price.
Understanding Regional Price Variations in Gold
There are several reasons why gold prices differ across various cities in India. The first reason is transportation costs. Gold is a physical commodity, and transporting it from one location to another incurs expenses. Most gold is imported by air and then distributed to interior regions, which includes costs for fuel, security, vehicles, and staff. The second reason is the volume of gold purchases. Gold demand varies by city and state. For instance, South India accounts for approximately 40% of the country's total gold consumption, where sellers buy gold in bulk, leading to lower prices. Conversely, prices might be higher in Tier-2 cities. The third factor involves local jewelry associations, which set prices in their respective regions, such as the Jewelers and Diamond Traders Association in Tamil Nadu. The fourth and most significant factor is the jeweler's purchase price. Jewelers who acquired their stock at a lower price may charge less, while those who bought it at a higher price will naturally charge more.
