Dollar surge takes gold to Rs 10,000 per gm; may rise to Rs 12,500, say traders
This marks a whopping rise of around Rs 22,840 per sovereign since January 1 when it was sold at Rs 57,200;
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CHENNAI: Continuing its relentless rally aided by the weakening of the rupee, gold price surged to an all-time high of Rs 10,005 per gram and Rs 80,040 per sovereign in Chennai on Saturday, crossing the 10k mark much earlier than expected.
This marks a whopping rise of around Rs 22,840 per sovereign since January 1 when it was sold at Rs 57,200. “We expected the Rs 10,000 mark to be crossed only by December. But, it has reached three months ahead of schedule. By the end of the year, prices may touch Rs 12,500 per gram,” said Santha Kumar S, secretary, Madras Jewellers and Diamond Traders Association.
He attributed the surge to the 50 per cent tariff imposed by the US government, which has pushed the dollar to Rs 88 and weakened the rupee. “Earlier, sudden spikes were followed by corrections. But this time, the price has been steadily climbing from Rs 6,500 per gram. With 12 per cent making charges and other expenses, jewellery weighing one sovereign now costs at least Rs 95,000, while jewellery with finer craftsmanship is priced around Rs 1,00,000,” he said.
On the same day last year, 22-carat gold was trading at Rs 6,720 per gram, marking an increase of Rs 3,285 year-on-year. On January 1 this year, the price stood at Rs 7,150 per gram.
Jewellers said the global trend of central banks converting their reserves into gold has added to the rally. “BRICS countries are investing heavily in gold. On the consumer side, the preference had shifted to lightweight jewellery, but with prices soaring, demand has begun to soften. Going forward, rates will largely depend on policy decisions by US President Donald Trump,” said B Sabarinath, president, Tamil Nadu Jewellers Federation.