Skyrocketing Prices Reshape Traditions and Strain Wallets
Dr. Noour Ali Zehgeer
Gold, long revered as a symbol of wealth, security, and cultural heritage, is slipping out of reach for many. As wedding season looms in India, gold prices have soared to unprecedented heights, hitting ₹76,500 per 10 grams for 24-karat gold as of early May 2025. This relentless surge, driven by global economic turbulence and speculative demand, is forcing middle-class families to rethink traditions, while jewellers grapple with plummeting sales. In key markets like Nashik and Jalgaon, the glitter of gold is fading, replaced by the harsh reality of affordability—or lack thereof.
A Global Storm Driving Gold’s Ascent
The gold market is caught in a perfect storm of economic and geopolitical factors. Spot gold prices breached $2,700 per ounce in April 2025, a 30% increase from last year’s $2,082, according to the World Gold Council. This spike is tied to international volatility: a weakening U.S. dollar (now at 104.20 on the DXY index), persistent inflation fears, and central bank buying sprees. China, for instance, added 60 metric tons to its gold reserves in Q1 2025, marking its fifth consecutive quarter of aggressive accumulation. Meanwhile, geopolitical tensions—escalating conflicts in Eastern Europe and trade frictions under U.S. policies—have cemented gold’s status as a safe-haven asset.
In India, these global trends hit hard. The rupee’s depreciation against the dollar (₹83.45 as of May 10, 2025) has amplified import costs, given that India relies heavily on foreign gold. Domestic demand, traditionally robust during weddings and festivals, is buckling under the weight of prices. The All India Gem and Jewellery Domestic Council (GJC) reported a 15% drop in gold demand in Q1 2025 compared to 2024, with 24-karat gold at ₹7,650 per gram and 22-karat at ₹7,010. “Prices could touch ₹80,000 per 10 grams by Diwali if global trends persist,” warns Sushil Bafana, a Jalgaon-based jeweller with three decades of experience.
Wedding Dreams Tarnished
In regions like Kashmir, where gold is woven into the fabric of matrimonial customs, the price surge is nothing short of catastrophic. For families like that of Junaid Mushtaq, a Srinagar clerk, the dream of a gold-laden wedding is fading. “I saved ₹2 lakh for my sister’s wedding jewellery, but at today’s rates, I can barely afford 25 grams,” he laments. The exchange of gold between families, a tradition symbolizing prosperity and goodwill, is now a financial burden. Many are scaling back, opting for minimal pieces or even artificial jewellery—a shift that feels like a betrayal of heritage.
Goldsmiths, too, are reeling. Javid Ahmad, a third-generation artisan in Srinagar, notes a 40% drop in orders since January. “Middle-class buyers are vanishing. Only the elite can afford gold now,” he says. The ripple effect is stark: local markets, once bustling with wedding shoppers, are eerily quiet. The GJC estimates that India’s gold jewellery demand fell to 115 tonnes in Q1 2025, a six-year low, down from 135 tonnes in Q1 2024.
Jewellers Caught in the Crossfire
The crisis extends beyond buyers to the gold trade itself. In Nashik, a hub for gold craftsmanship, jewellers report unsold inventory piling up. Bashir Ahmad Rather, president of the All-Kashmir Valley Gold Dealers and Workers Union, describes the situation as dire: “Sales are down 30% compared to last year. If prices don’t stabilize, small retailers may shut down.” The wedding season, typically a lifeline for jewellers, offers little hope. With prices showing no signs of cooling, consumers are turning to alternatives like silver (₹88,000 per kg) or digital gold platforms, which offer fractional ownership but lack the tangible allure of physical jewellery.
The industry’s woes are compounded by policy challenges. India’s 15% import duty on gold, unchanged since 2022, adds to the cost. The GJC has lobbied for a duty cut to 10%, arguing it could boost demand, but with fiscal pressures mounting, the government is unlikely to relent. Meanwhile, smuggling—often tied to high duties—has surged, with 3.5 tonnes of illicit gold seized in 2024, per the Directorate of Revenue Intelligence.
Why Gold Keeps Climbing
Several forces are conspiring to keep gold prices aloft:
– Global Uncertainty: Trade tensions and sanctions, particularly U.S.-China frictions, are driving investors to gold.
– Central Bank Demand: Countries like China and India are stockpiling gold to diversify reserves, tightening supply.
– Inflation Hedge: With global inflation averaging 5.2% in 2025, gold remains a go-to asset.
– Currency Dynamics: A softer dollar and rupee depreciation make gold costlier in India.
A Cultural Shift Looms
For centuries, gold has been more than a commodity in India—it’s a cornerstone of identity, from weddings to inheritance. Yet, as prices render it a luxury, the middle class is being priced out. Families are exploring alternatives: silver jewellery, lab-grown diamonds, or even fixed deposits. “Gold was our safety net, but now it’s a pipe dream,” says Priya Sharma, a Mumbai teacher. Some predict a gradual evolution in traditions, with weddings prioritizing experiences over opulence.
No Relief in Sight
Analysts offer little optimism. The World Gold Council projects global prices could hit $2,900 per ounce by Q4 2025 if central banks continue their buying frenzy. In India, a stronger monsoon and rural recovery might spur some demand, but affordability remains the bottleneck. For now, families face tough choices: buy less gold, abandon traditions, or hope for a miracle. As gold’s glitter grows ever distant, the question lingers—will it remain a symbol of prosperity, or become a relic of a bygone era?
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Blurbs
A Tradition Under Threat: Soaring gold prices, now at ₹96,500 per 10 grams, are forcing Indian families to scale back on wedding jewellery, threatening centuries-old customs.
Jewellers in Crisis: With demand at a six-year low, India’s gold trade faces an uncertain future as middle-class buyers vanish and inventories pile up.
Note: Dr. Noour Ali Zehgeer is a seasoned commentator with 29 years of experience in India’s telecom industry. A former corporate executive, he has earned accolades for his contributions to marketing and the Make in India initiative. A prominent political analyst, Zehgeer frequently appears on national television, offering insights on economic and cultural trends. His work blends sharp analysis with a deep understanding of India’s social fabric.
