Daijiworld Media Network - Mumbai
Mumbai, Aug 9: The Indian bullion market experienced a week of marginal gains, driven by global economic cues and a surge in festive demand. While gold prices saw a mid-week dip, the precious metal recovered to end the week on a positive note. Analysts attribute this resilience to ongoing trade tariff uncertainties and a weakening dollar, which continue to support gold's role as a safe-haven asset.
According to data from the India Bullion and Jewellers Association (IBJA), the price of 24-carat gold (10 grams) began the week at Rs 1,00,167. It saw a significant drop of ?91 mid-week before ending at ?98,534. Looking ahead, experts forecast that gold will trade in a volatile range of Rs 99,000 to Rs 1,01,500.
Jateen Trivedi of LKP Securities commented on the market's performance, noting that domestic prices were bolstered by a weaker rupee. "Going ahead, prices are expected to remain choppy as Trump's tariff stance continues to create uncertainty," he stated. He also highlighted that any positive movement in the rupee could potentially limit gold's upward trajectory.
The market sentiment is further supported by a recent report from Bernstein, which revealed that India's wealthiest households hold nearly 60% of their financial assets in physical assets like real estate and gold.
In a broader context, the US's large trade and budgetary deficits are raising concerns about the dollar's status as a reserve currency. Analysts suggest that gold is the most plausible alternative, and even a 5% shift of global reserves into gold could trigger a substantial price surge. India, which holds 15% of the global gold market, stands to be significantly impacted.
Domestically, the Reserve Bank of India (RBI) has projected a consumer price index (CPI) inflation of 3.1% for FY2025-26, citing strong monsoon and robust agricultural sowing. However, the RBI also warned that unfavorable base effects and demand-side pressures could push CPI inflation beyond 4% by the end of the fiscal year. An increase in gold prices has already contributed to a rise in core inflation, which reached 4.4% in June.