New Delhi: Gold prices in India continue to remain near record highs, leaving jewellery buyers worried and forcing many households to postpone purchases despite the ongoing wedding season. However, market experts believe the yellow metal may not see a major correction anytime soon due to several global and domestic factors driving the rally.
According to analysts, one of the biggest reasons behind the sharp rise in gold prices is growing geopolitical uncertainty across the world. Rising tensions in West Asia and global trade concerns have pushed investors towards safer assets like gold, traditionally considered a secure investment during unstable times.
Another major factor is the weakening of the Indian rupee against the US dollar. Since gold is imported and traded globally in dollars, any weakness in the rupee directly increases domestic prices in India.
Experts also point to strong investment demand despite weaker jewellery sales. Many investors are increasingly shifting money into gold ETFs and digital gold products amid volatility in equity markets. Reports suggest that investment demand for gold has risen sharply even as traditional jewellery purchases have slowed down.
The fourth major reason is continued buying by central banks and institutional investors globally. Several countries have increased their gold reserves over the past few years to reduce dependence on the US dollar and strengthen financial stability.
While footfall in jewellery markets has declined due to soaring prices, analysts believe gold may continue to remain expensive unless global tensions ease significantly and currency markets stabilise.