When GoodReturns announced that 24‑carat gold traded at ₹1,32,786 per 10 grams on October 18, 2025, investors felt the shockwave instantly. The surge, though a 0.85 % dip from the previous day’s ₹1,33,928, still marked a historic high for India’s most beloved safe‑haven asset. Across Mumbai, Delhi, Kolkata and Chennai, traders reported frantic buying as the festive season kicked in, while overseas markets watched spot gold breach the $3,890 per ounce barrier.
Historical backdrop: From modest beginnings to record‑setting heights
Back in early January 2025, gold hovered around ₹7,950 per gram – roughly ₹79,500 per 10 grams. Fast‑forward to October, and the metal has climbed more than 55 % in just nine months. The rally didn’t appear out of thin air; it traces its roots to a late‑2024 boom where gold breached ₹78,755 per 10 grams in October 2024, then nudged past ₹85,000 in early 2025. By September 30, 2025, the price touched the psychological ceiling of ₹1.20 lakh per 10 grams, setting the stage for the October peak.
Day‑by‑day price action in October 2025
On October 6, spot gold in the international market sat just under $3,860 per ounce, a 49.6 % year‑to‑date surge from $2,580 in January. Domestically, the price ranged between ₹1,30,549 and ₹1,36,647 per 10 grams, with the median settling at ₹1,32,786 on the 18th. A quick glance at earlier in the month shows the price at ₹1,28,360 on October 15 in Mumbai and Kolkata, ticking up by ₹10 in early trade as the rupee‑dollar exchange wavered.
What’s fueling the rally? Global and local forces collide
Three big drivers intertwine:
- Geopolitical tension: Renewed U.S.–China trade frictions have investors scurrying toward assets that aren’t tied to fiscal policy swings.
- Expectations of U.S. rate cuts: The Federal Reserve’s dovish tone in September nudged bullion higher, a pattern that reverberated in Indian markets.
- Festive‑season demand: Diwali and Navratri celebrations spur a surge in jewellery purchases, especially in tier‑1 cities.
“Gold is behaving like the world’s emergency exit,” said Rajat Jain, senior analyst at GoodReturns. “Whenever macro‑uncertainty spikes, we see a swift capital flight into bullion, and that’s exactly what’s happening now.”
Silver isn’t far behind
Silver prices mirrored the gold frenzy. On October 15, Delhi, Mumbai and Kolkata saw the metal at ₹1,89,100 per kilogram, while Chennai pushed a record ₹2,06,100 per kilogram. Internationally, spot silver hit $53.60 per ounce on October 14, the highest since 2022, before settling at $51.83 on the 15th. The metal’s 0.8 % rise came despite tighter global supply, underscoring the broader appetite for precious metals.
Impact on India’s economy and the jewellery sector
The ripple effects are mixed. On the upside, wealth‑preservation products linked to gold – such as sovereign gold bonds – have seen a surge in subscriptions, bolstering the government’s fiscal toolbox. On the downside, jewelers are feeling the squeeze; a 5 % price hike translates into tighter margins for small‑scale retailers, especially those in South India where consumer price sensitivity is higher.
Moreover, the widening trade deficit is a lingering worry. With India importing roughly 250 tons of gold each month, the higher per‑gram price inflates the outflow, pressuring the current account.
Expert perspectives and policy signals
“The Reserve Bank of India may need to monitor the rupee‑dollar volatility more closely, as it directly feeds bullion pricing,” warned Dr. Ananya Kapoor, economist at the Indian Council for Research on International Economic Relations. “A calibrated response, perhaps easing import duties temporarily, could ease pressure on consumers without derailing the safe‑haven narrative.”
Meanwhile, the Ministry of Finance has hinted at stricter reporting for large gold purchases, aiming to curb illicit smuggling that often spikes during price rallies.
What’s next? Forecasts and potential flashpoints
Analysts project a modest correction in early November as festive buying wanes, but most expect gold to stay above the ₹1.20 lakh mark for the foreseeable future. The key variables will be:
- U.S. monetary policy – any surprise rate hike could trigger a pullback.
- China’s economic health – a slowdown would likely push more investors into bullion.
- Domestic inflation – if consumer price growth stays high, real‑yield considerations may keep gold attractive.
In short, while a short‑term dip is possible, the longer‑term trajectory points to gold remaining a cornerstone of Indian investment portfolios.
Frequently Asked Questions
How will the gold price surge affect average Indian households?
Higher gold prices boost the value of existing jewellery and investments, but they also make new purchases more expensive. For families planning to buy gold during Diwali, the cost could rise by up to 10 %, prompting many to consider alternatives like sovereign gold bonds.
What role do global geopolitical tensions play in India's gold market?
When U.S.–China relations sour, global investors often flee to safe‑haven assets. India, as a large gold consumer, feels the ripple effect: spot gold spikes, pushing domestic prices higher as import costs rise.
Could the Indian government intervene to temper gold prices?
The finance ministry has signalled tighter reporting on large gold purchases and may tweak import duties temporarily. Such measures aim to curb smuggling and speculative buying without destabilising the market.
Why are silver prices rising even faster than gold?
Silver’s industrial demand combined with its safe‑haven appeal creates a double‑edged boost. Tight global supply and increased investor appetite have pushed spot silver to $53.60 per ounce, outpacing gold’s percentage gain.
What should investors watch for in the coming months?
Key signals include U.S. Federal Reserve announcements, China’s manufacturing PMI, and India’s CPI data. Any surprise in these metrics could either reinforce gold’s safe‑haven status or trigger a corrective pullback.
