Team Herald
MARGAO: The gold market in India is experiencing unprecedented volatility, with prices reaching record-breaking levels, reshaping consumer behaviour and challenging local jewellers. In Goa, industry leaders are witnessing a significant transformation driven by global economic uncertainties.
Providing critical insights into the current market dynamics, Pramit Raikar, President of the Goa Gold Dealers Association (GGDA), said, “Gold prices hit an all-time high on Friday, February 7 amid global uncertainties and strong investor demand. In India, gold breached 85,000 per 10 gms mark for the first time, gaining almost 1,200 per gram in a single day. Globally, gold touched an all-time high of $2,855 per ounce.”
Elaborating on the complex factors driving this surge, he said, “Trade war tensions between US and China—with the latter imposing tariffs on the former’s imports in retaliation for US duties on Chinese goods—have prompted investors to turn to gold as a safe-haven asset. A weak US dollar has made gold more attractive for international buyers. Inflation risks, uncertainty about Federal Reserve rates, and central bank buying are some of the factors driving the gold rally.”
“The local market is experiencing significant challenges. As far as the market in Goa is concerned, jewellery stores are experiencing lower sales due to reduced demand,” Raikar explained.
“Presently, we are experiencing 20% less sales compared to last year. Higher gold prices have made jewellery less affordable. Consumers are delaying their jewellery purchases, waiting for gold to stabilise or decrease,” Raikar added.
“Adapting to these challenges, consumers are developing new strategies. Rising gold prices are prompting customers to opt for recycling their old jewellery and are choosing lightweight and lower purity—preferably 20 kt and 18 kt—which are more affordable while still maintaining value and appeal. Since the Goa market is price-sensitive, we have seen a growing trend towards minimalistic jewellery which requires less material and remains accessible despite rising prices,” said Raikar.
Providing additional market context, Vikram Verlekar, Managing Director (MD) of Ulhas Jewellers, said, “November to April is a peak season for weddings in Goa. NRIs and tourists visiting Goa during the end of the year create high demand for purchase of gold jewellery. Last December, there was more demand due to the Exposition of the relics of St Francis Xavier.”
Highlighting the global economic backdrop, he said, “Today, globally, gold has sky-rocketed to reach an all-time high due to geopolitical problems, uncertainties caused by tariff wars. Investors and fund houses are increasing their investment in gold for safe returns, as gold is considered to be a safe-haven asset. Rising demand for gold reserves in central banks to beat inflation is another reason.”
“The market tension is palpable. Such high rates have created a shock in the minds of the customers as to whether to invest now or wait for the gold rates to come down. Most jewellery stores are also running low on walk-ins,” Verlekar added.
Expressing hope that recent budget provisions might provide relief, Raikar remained cautiously optimistic, saying: “Reduction in personal income tax rates along with tax exemption limit raised to Rs 12 lakh in the recently concluded budget will significantly boost consumer spending and drive demand for jewellery.”
The broader market trends support these local observations. Recent data shows 24K gold in Mumbai and other metro cities surged by Rs 270 to Rs 86,510 per 10 grams. Internationally, spot gold rose 0.48% to $2,867 an ounce, reflecting continued global economic uncertainties. Analysts predict the gold prices will remain strong, influenced by ongoing geopolitical tensions, central bank policies, and global economic conditions.
The current landscape suggests a complex interplay of global economic factors, investor sentiment, and local market dynamics, with gold emerging as a critical asset in uncertain times.