Gold Hits Record Rs 1.19 Lakh as Investors Flock to Safe Havens Amid Global Uncertainty

Mumbai, October 7, 2025: Gold prices in India jumped sharply on Monday, surging by Rs 3,000 to reach Rs 1.19 lakh per 10 grams, while silver also touched an all-time high of Rs 1.48 lakh per kilogram, according to industry sources. Analysts attribute the rally to a combination of global political uncertainty, concerns over U.S. government stability, and investor expectations of further Federal Reserve rate cuts.

The price spike comes amid a year of extraordinary gains for the yellow metal, which has climbed 52% since October 2024, when retail prices hovered around Rs 78,000 per 10 grams. With India’s 3% goods and services tax (GST), the cost for 10 grams of gold now stands at Rs 1,22,570 for consumers.

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Global Tensions Fuel Safe-Haven Demand

Investors are turning to precious metals as geopolitical concerns intensify. In the United States, a looming government shutdown due to congressional deadlock has stoked economic uncertainty. Meanwhile, rising nationalist and anti-immigrant sentiment in Japan has further unsettled global markets.

“Gold remains a preferred hedge against instability,” said Jateen Trivedi, Vice President and Research Analyst at LKP Securities. “However, after such a sharp rise, retail investors should exercise caution and avoid making large, lump-sum investments, as the risk of short-term corrections has increased.”

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Festive and Wedding Demand Keeps Retail Sales Strong

Despite soaring prices, demand for gold jewelry remains robust, particularly during the Diwali and wedding season. Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, explained, “Gold continues to be both an investment and a cultural necessity. Customers are buying within their budgets, but key festivals and weddings drive sustained demand for 22-karat and 18-karat pieces.”

Retailers are also witnessing a growing preference for lightweight jewelry, reflecting consumers’ efforts to balance tradition with high prices. Santosh Kataria, CMD of DP Abhushan, noted a 20-25% increase in lightweight jewelry purchases in recent months. Additionally, 18-karat and 14-karat jewelry sales have risen by 10-15%, largely fueled by wedding season demand.

Silver is experiencing a similar surge, with Kataria observing that it has “emerged as the new gold”, attracting investment interest due to its perceived value and price momentum.

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Outlook and Expert Advice

Analysts caution that while festive and cultural factors continue to support retail demand, market volatility could lead to short-term price corrections. “Investors should consider staggered purchases or smaller allocations instead of chasing the rally,” Trivedi added.

With global economic uncertainty showing no signs of abating, gold and silver are likely to remain attractive as hedges, while jewelers anticipate continued strong sales in the coming festive weeks.