Gold and silver hit record highs amid global safe-haven demand

Kolkata: Gold and silver prices touched new highs in the Indian markets on Monday, tracking the undiminished global institutional appetite for bullion, with uncertainties tied to trade and start to a US rate easing cycle continuing to undergird safe haven assets. While silver prices climbed 4.6%, or ₹6,300 per kg, at the retail end to touch ₹1.44 lakh on Monday, gold witnessed a rally of ₹2,000 per 10 gm to end at ₹1,15,454. The steady climb in both metals, however, dented sentiment in the physical markets.

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Dussehra is one of the most auspicious days for bullion purchases.


Silver, which also has significant use in electric vehicles and other industrial applications, climbed from Friday's close of ₹1,38,100. It has witnessed a 23% rally in a month, with prices appreciating from ₹ 1,17,110.

Surendra Mehta, national secretary of India Bullion & Jewellers Association (IBJA), said demand remains strong in tier II-III towns, where both metals are considered important asset classes. "However, urban demand is yet to pick up as the consumer sentiment remains muted. The trade expects demand would be evident on Dussehra," he said.

Gold prices have surged more than 12% in a month. Taxed at 3% GST, 10 gm gold will cost ₹1,18,917 at the retail end.

NS Ramaswamy, head of commodities, Ventura Securities, said a fresh trigger to the momentum is also due to the geopolitical risks. "Economic uncertainties and the ongoing geopolitical tensions continue to contribute to the elevated status of gold and silver. Gold never paused for the consolidation," he said. "Time correction could come up in the next couple of weeks, for a further upward rally, but not a price correction."

Gold exchange traded fund (ETF) inflows and investment demand seen in the first half of 2025 is near 1,028 tonnes, as compared with 1,182 tonnes for the entire 2024. Analysts said the buying spree by sovereign wealth funds, long-horizon investors and central banks continues.

"Profit-takers have stepped aside, and physical demand has given way to financial demand, and momentum is being fuelled by investors who once hesitated but are now desperate to find an entry," Ramaswamy of Ventura said.

Silver has made a strong breakout from $42 and is now poised to reach $49.80, analysts said. Silver as an industrial commodity is more volatile and more responsive to the economic cycle.

Domestic prices of gold could see a 3-4% upside this year end and silver 7-8%, said Mehta of IBJA. The only headwind could be any signal of tighter monetary policy as the bullion pack remains highly sensitive to monetary policy expectations.