The shine of precious metals has suddenly increased in the domestic and international bullion market. A huge jump has been recorded in the prices of gold and silver during the trading sessions of the last one week. While gold has become costlier by about ₹ 7,960 per 10 grams in the Multi Commodity Exchange (MCX) and local spot markets within a week, silver prices have also seen a jump of more than ₹ 10,000 per kg due to industrial demand and safe haven inflows. This huge surge, which came just ahead of weddings and shopping for the upcoming festive season, has affected the budgets of retail buyers. There has been a big change in the weekly prices of gold and silver. According to bullion market data, this big difference has been recorded in the futures and spot market of gold and silver on weekly level: Metal / Category Previous level (starting of the week) Latest level (weekend closed) Total weekly change 24K Gold (per 10 grams) ₹1,54,400 ₹1,62,360 – ₹1,62,438 +From ₹7,960 +₹8,000 22K Gold (per 10 grams) ₹1,41,500 ₹1,48,800 – ₹1,49,650 +₹7,300 Silver (per 1 kg) ₹2,35,000 ₹2,45,000 – ₹2,48,120 +₹10,000 to +₹10,670 Why is there such a sudden rise in the bullion market? According to commodity and financial market experts, the major global and economic factors responsible for this sharp rise in gold and silver are: Fall in US Dollar and Bond Yield: Due to weakness in the US Dollar Index (DXY) and fall in US Treasury yield, there has been a huge increase in demand for non-yielding assets like gold globally. US Treasury's bond buyback plan: The decision by the US Treasury Department to double the long-dated bond buyback has raised concerns of currency debasement in international markets, due to which investors have increasingly turned to bullion. Geopolitical tensions and crude oil movement: Due to rising geopolitical tensions in the Middle East and rising crude oil prices, global investors are considering gold as the safest option for portfolio hedging. Heavy purchase of gold by central banks: Major central banks around the world are continuously increasing gold reserves in their foreign exchange reserves, due to which the demand for physical gold remains strong in the market. Strong industrial consumption of silver: Due to huge industrial demand for silver in green energy, solar panels and electronics sectors, both speculation and investment in the white metal have increased. Important advice for retail buyers and investors Checking Hallmarking: While buying gold jewellery, it is mandatory to check the 6 digit HUID (Hallmark Unique Identification) code. Making charges and taxes: The final price of jewelery includes 3% GST and making charges, so it would be wise to compare across different jewelers before purchasing. Digital Gold and ETFs: If your objective is only to invest, then Gold ETF or Sovereign Gold Bond (SGB) can be a better option than physical gold, where there is no cost of storage and making charges.
