Gold has always been a symbol of wealth and prosperity. It has been a highly sought-after metal for centuries and has played a significant role in shaping the economy of many countries. In India, gold is not just a precious metal, but it holds a cultural significance as well. From weddings to festivals, it is an essential part of our traditions. Over the years, the demand for gold in the country has increased significantly, leading to a steady rise in its prices. However, in recent years, the price of gold has seen a massive surge, with it crossing the staggering mark of ₹1 lakh per 10 grams as of April 22, 2025.
To put things into perspective, let’s take a trip down memory lane to the year 2000. As per BankBazaar data, the price of gold stood at around ₹4,400 per 10 grams. It is safe to say that the journey of gold prices in the past 25 years has been nothing short of a rollercoaster ride. From a meagre ₹4,400 to a whopping ₹1 lakh, the journey of gold prices has been incredible, and it has left many people wondering about the factors responsible for this significant increase.
One of the key reasons for the surge in gold prices is the ever-increasing demand for the metal. India has always been known as one of the largest consumers of gold globally. The demand for gold in the country is not just limited to jewellery but also for investment purposes. Gold is considered a safe haven for investors, especially during uncertain times. The ongoing COVID-19 pandemic has further increased the demand for gold as people are looking for a safe investment option amid the economic uncertainty.
Another crucial factor contributing to the rise in gold prices is the global economic situation. Gold is an internationally traded commodity, and any changes in the global economy have a direct impact on its prices. In recent years, we have seen various economic and political uncertainties, such as trade wars, Brexit, and the ongoing pandemic, which have led investors to turn towards gold as a safe investment option. This increase in demand has caused a surge in gold prices globally, which has also affected the prices in India.
Moreover, the weakening of the Indian rupee against the US dollar has also played a significant role in the rise of gold prices. Since gold is traded in US dollars, any fluctuation in the value of the Indian rupee against the dollar has a direct impact on its prices in India. As the value of the rupee decreases, it takes more rupees to buy the same amount of gold, leading to an increase in prices.
Another factor that cannot be ignored is the limited supply of gold. Gold is a finite resource, and its supply cannot be increased artificially. As the demand for gold continues to rise, the limited supply has led to a surge in its prices. Additionally, the mining and extraction of gold have become more challenging and costly, further adding to its value.
Despite the steep rise in gold prices, experts believe that it is still a good investment option. Gold has stood the test of time and has proven to be a reliable store of value. It provides a hedge against inflation and economic uncertainties, making it a popular choice among investors. Moreover, gold prices tend to rise during times of crisis, making it a lucrative investment option.
The increase in gold prices has also had a positive impact on the economy. India is one of the largest gold importers in the world, and the rise in gold prices has led to an increase in the country’s foreign exchange reserves. This increase in reserves has helped stabilize the economy and has also boosted the government’s efforts to reduce the current account deficit.
In conclusion, the significant increase in gold prices, crossing the mark of ₹1 lakh per 10 grams, is a result of various factors such as increasing demand, global economic situation, weakening rupee, and limited supply. Despite the high prices, gold continues to be a popular investment option and a symbol of wealth and prosperity. The rise in gold prices has also had a positive impact on the economy, and it is expected to remain a valuable asset in the years to come. As we move towards an uncertain future, let us take inspiration from the steady rise of gold prices and continue to strive for growth and prosperity.
