Gold prices climb Rs 1,500 in one day on safe haven buying and festive demand

Gold prices in India hit a record high of Rs 78,300 per 10 grams on October 2, driven by increased safe-haven buying amid escalating geopolitical tensions in the Middle East and a decline in US bond yields. The Rs 1,500 jump from the previous day highlights global uncertainties that are prompting investors to seek the stability of gold.

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Gold prices in India soared to a new peak of Rs 78,300 per 10 grams on October 2, driven by safe-haven buying as geopolitical tensions in the Middle East intensified and US bond yields dropped. The price increase, a Rs 1,500 surge compared to the previous day, reflects global uncertainties that have pushed investors towards the security of gold.

According to Kumar Jain, spokesperson for the India Bullion & Jewellers Association (IBJA), the rise in gold prices has created a buzz in Mumbai’s Zaveri Bazaar, a key gold trading hub. “Footfalls have increased by up to 20% compared to last week,” he said, indicating strong consumer interest. With the Navratri festival beginning on October 5, an auspicious time for gold purchases, many consumers are pre-booking gold to take delivery during the festival period.

This surge in demand is also attributed to the upcoming wedding season, which begins in November and lasts through early next year. Gold remains a traditional and essential part of Indian weddings, fueling significant purchases in the months leading up to the season. This heightened demand has led to an increase in work hours for karigars (goldsmiths), who are now working 12-hour shifts instead of the typical 8-hour days to meet consumer needs.

Industry experts predict that gold prices may continue to rise if geopolitical tensions worsen. Bhargav Vaidya, a gold trade analyst, recommends increasing the percentage of gold in investment portfolios. “Earlier, we advised that 15% of one’s investment should go into gold. However, with annual returns now reaching 18-20%, it’s wise to increase this allocation to 25%,” Vaidya suggested.

As festival season coincides with rising geopolitical uncertainties, gold is becoming an increasingly attractive asset, drawing in both traditional buyers and savvy investors looking for safe and profitable returns.