Gold above ₹1 lakh per 10gm: An old love must confront new risks

India's love of this metal endures but the laws of economics still apply and buyers mustn't get tempted into a speculative trap

- RAJESH SHUKLA

Gold has always held a singular place in India's social and economic imagination. It is ornament, investment, inheritance and informal insurance all at once. Yet, this festive and wedding season, India confronts a paradox. In major centres, the price of 24-karat gold has broken above ₹1 lakh per 10gm, with expectations that it could push toward ₹1.4 lakh in the near term. Still, households continue to buy—driven partly by ritual and partly by the conviction that high prices only validate its safe-haven role. That cultural attachment remains powerful, but it now collides with the strains of macroeconomics, business adaptation and household constraints.

Globally, the rally has been underpinned by safe-haven demand, central bank accumulation, inflationary pressures and weakness in the US dollar. These forces have propelled benchmark prices higher, translating into domestic records in India. Locally, the dynamic is paradoxical. When prices soar, economic logic predicts demand contraction. Yet, Indian families often interpret the rally as a signal to buy more—'If tomorrow's prices will be higher, better buy now.' Beneath this fervour, however, lies a structural shift in demand.