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India’s Gold Boom: Prices Soar as Retail and Global Demand Spike

Prime Highlights

  • Indian gold prices rose 23% during the year 2025 to reach an all-time high of ₹93,940 per 10 grams on the Multi Commodity Exchange (MCX).
  • The surge is fueled by inflationary pressure, geopolitical risk, and strong central bank and Indian demand.

Key Facts

  • In mid-April 2025, gold prices reached ₹93,940 for 10 grams, while global rates reached $2,933 an ounce.
  • Indian retail consumption has remained robust with the help of wedding season and festival season shopping.
  • Relief on income tax in the Union Budget of 2025 has helped the investment in gold and disposable incomes.

Key Background

Gold has registered huge gains in 2025, posting a 23% value increase since the start of the year. The performance is an encore to two solid years of value appreciation — 13% in 2023 and 27% in 2024 — to solidify gold as a safe-haven asset of choice during times of uncertainty around the world.

The recent upsurge has been precipitated by a number of major factors. Geopolitical tensions in the Middle East and Eastern Europe have tested the stability of the global economy, with investors fleeing it for gold as a security asset. Further, ongoing inflation in global markets, combined with speculations regarding recent interest rate reductions by the US Federal Reserve, have also contributed to gold’s popularity.

Domestically, demand for gold in India continues to be strong. Union Budget 2025 has further contributed to augmenting such a demand by providing income tax relief to a limit of a level of income of ₹12 lakh per year. This has made itself evident as increased disposable incomes, particularly in the case of middle classes, to induce the purchase of gold during festive occasions and the current wedding season.

Apart from that, the world’s central banks have also been accumulating gold reserves on a progressively solid foundation, underpinning the metal’s image as a store of value. However, failure to exempt duty on gold imports in the budget was some players’ lost opportunity. Moreover, no fresh incentives announced under the gold monetisation scheme fell short of some players’ expectations in the industry.

Bucking the headwinds of a strong US dollar and strong treasury yields, market analysts see the gold price bull run to persist. Since the market itself is positive, the projections have seen the price hitting ₹95,000 for every 10 grams around Diwali in 2025. Investors are nevertheless cautioned by the experts to watch out for the changing global geopolitical landscape and policy changes, which will prove imperative in guiding future price direction of movements.