The price of 24-carat gold surged to Rs 1 lakh per 10 grams for the first time in India | Current Affairs | Vision IAS
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    The price of 24-carat gold surged to Rs 1 lakh per 10 grams for the first time in India

    Posted 23 Apr 2025

    2 min read

    Key Global Factors Driving Price Surge

    • Geopolitical Tensions: Rising global conflicts and economic uncertainties have led investors to flock to gold, which is seen as a safe-haven asset.
    • US Federal Reserve Rate Cuts: With falling interest rates, the appeal of gold increases. As a non-yielding asset, gold becomes more attractive when the opportunity cost of holding cash or bonds drops. 
    • Weakening of the US Dollar: A declining dollar makes gold cheaper for buyers using other currencies, thereby boosting demand.
    • Central Bank Accumulation: Central banks, especially in Asia, are aggressively purchasing gold to reduce dependency on the US dollar and diversify reserves.

    India’s Gold Market 

    • India is the world’s 2nd largest consumer of gold, just after China. In 2024, India's gold demand reached 802.8 tonnes.
    • Approximately 85% of India’s gold is imported, making domestic prices highly sensitive to international trends.

    Reasons for High Gold Demand in India

    • Financial Security: Gold is trusted as a long-term store of value, especially during inflation or market instability.
    • Cultural & Religious Significance: Gold is considered auspicious and forms an essential part of festivals like Diwali, Dhanteras, and Akshaya Tritiya.
    • Wedding Season Boost: Gold purchases spike during wedding season, with jewelry being a traditional and prestigious gift for brides.
    • In rural many people lack access to banks/stock markets. For them, gold serves as a trusted and liquid asset for saving, investing, or even borrowing.

    Gold Reserves          

    India 

    • Gold Ore: The largest resources in terms of gold ore (primary) are located in Bihar (43%), followed by Rajasthan (24.92%), and Karnataka (20%). 
    • Metal Content: In terms of metal content, Karnataka remained on top, followed by Rajasthan, Andhra Pradesh, and Bihar.

    World 

    • Major Holders of Gold Reserves: United States, followed by Germany and Italy.
    • Major Exporters: Germany, followed by the European Union and Switzerland (World Integrated Trade Solution, 2023). 
    • Tags :
    • Gold
    • Gold Prices
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