Gold and Silver Prices Rise in India Amid Global Fiscal Concerns
| 2025-05-24
Gold and silver prices rose across major Indian cities including Delhi, Mumbai, Chennai, Bengaluru, Kolkata, and Hyderabad
Gold and silver prices in India rose for a third day on May 22, 2025, as US fiscal worries drove global precious metal markets higher.
Gold and Silver Gain Ground in India as Global Economic Worries Mount
Gold and silver prices in India climbed for a third consecutive session on Wednesday, May 22, 2025, driven by rising concerns over the United States’ budget deficit and its effect on international financial markets.
On the Multi Commodity Exchange (MCX) of India, the June 5 gold futures contract opened with modest gains before rallying by Rs 513 to reach a high of Rs 96,049 per 10 grams. At last report, the contract was trading at Rs 96,040, reflecting a rise of Rs 504 or 0.53 per cent from the previous session.
Silver futures for July 4 delivery followed a similar trend, beginning the day with a gain of Rs 101 to Rs 97,897 per kilogram. Prices later peaked at Rs 98,269, marking a rise of Rs 473. The contract was last seen trading at Rs 98,121, an increase of Rs 325 or 0.33 per cent.
International Market Movement
The domestic rise in precious metal prices mirrored developments on international exchanges. On the COMEX, a key commodities exchange based in the United States, gold futures were trading at approximately $3,317.30 per troy ounce. Meanwhile, the spot price for gold stood at $3,320.58 per ounce by 11:00 am, a gain of roughly 0.70 per cent.
Analysts have attributed the upward trend to mounting fiscal concerns in the United States. The country’s growing budget deficit has put pressure on treasury yields, traditionally seen as a safe investment, prompting a shift of investor interest towards precious metals.
City-wise Price Breakdown
In major Indian cities, retail prices for both gold and silver reflected the overall bullish sentiment in the market.
In Delhi, 24-carat gold was priced at Rs 97,680 per 10 grams, with 22-carat gold at Rs 89,550 per 10 grams. In Mumbai, the rates for 24-carat and 22-carat gold were Rs 97,530 and Rs 89,400 per 10 grams respectively. The same prices prevailed in Kolkata and Chennai, indicating uniformity in key urban markets.
For silver, consumers in Delhi, Mumbai, and Kolkata faced a price of Rs 1,00,000 per kilogram. Chennai, however, recorded a notably higher rate of Rs 1,11,000 per kilogram.
Recent Price Trends and Forecasts
Gold prices in India have experienced a steady upward trajectory over the past month. As of Saturday, May 24, the average price for 24-carat gold reached Rs 9,769 per gram, with 22-carat gold priced at Rs 8,956 per gram. This marks a consistent rise from earlier in the month, when prices hovered around Rs 9,960 per gram on May 8, 2025.
Internationally, market analysts predict that the price of gold could climb to $4,000 per ounce over the coming year, driven by persistent global economic uncertainty and concerns over inflation.
Cultural Significance and Consumer Response
In India, gold holds deep cultural significance, often associated with wealth, prosperity, and social status. It plays a central role in weddings, religious festivals, and family milestones, leading to traditionally strong demand for the precious metal.
However, the recent price surge has begun to temper consumer enthusiasm. While gold remains a preferred investment choice, especially during significant occasions like the annual Akshaya Tritiya festival and wedding season, higher prices have prompted some consumers to exercise caution in their purchases.
Market Outlook
Despite the current upward momentum, some financial analysts suggest the possibility of a price correction in the near future. Gold prices have already retreated by around 7 per cent from their peak in April 2025, and projections indicate that domestic rates could fall to approximately Rs 88,000 per 10 grams if market conditions stabilise.
Investors are being advised to closely monitor global economic trends and consider diversifying their holdings to mitigate potential risks associated with market volatility.
Context: Global Economic Implications
The recent rally in gold and silver prices underscores broader anxieties in global financial markets. The United States’ rising fiscal deficit has exerted upward pressure on treasury yields, reducing the attractiveness of government bonds and enhancing the appeal of traditionally safer assets like precious metals.
This dynamic has been particularly influential in emerging markets like India, where gold is both a cultural commodity and a financial safe haven. The current trends reflect not only domestic consumption patterns but also India’s integration into the wider global economy, where fiscal policy decisions in one region can have ripple effects on investment behaviour and commodity pricing elsewhere.
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