Gold And Silver Prices Surge In India During Festive Season; Weaker Rupee And Global Demand

Gold and silver prices in India have surged to record levels in June 2025, with spot gold reaching Rs 1,02,055 per 10 grams and silver crossing Rs 1,09,900 per kg, according to month-end domestic spot data compiled by Thurro.

The rally marks a continuation of a strong three-year trend, driven by a combination of domestic and global factors.

Gold has nearly doubled in three years, rising from Rs 50,730 per 10 grams in June 2022 to Rs 96,840 in early June 2025, representing a 90.9 per cent increase. Silver has seen an even steeper climb, jumping 86 per cent from Rs 59,080 per kg in June 2022 to Rs 1,09,900 in June 2025.

One key factor behind the sharp domestic rise is the weaker rupee, which dropped to Rs 86 per dollar in 2025 from Rs 79 in 2023.

As India imports nearly all its gold and silver, currency depreciation amplifies local prices, even when global rates remain relatively stable.

Global trends also contribute. Central banks purchased over 1,000 tonnes of gold in 2024 for the third consecutive year, tightening supply. The Reserve Bank of India added to its reserves, boosting institutional demand.

Geopolitical Uncertainty Fuelling Gold

Global instability has reinforced gold’s appeal as a safe-haven asset. Events such as the collapse of SVB and Credit Suisse in 2023, US-China trade tensions, and the Russia-Ukraine conflict have intensified risk aversion. This surge in demand is reflected in domestic gold prices, which spiked nearly Rs 9,000 between November 2024 and early 2025.

Unlike gold, silver prices are largely industrially driven. Demand from sectors such as solar panels, semiconductors, batteries, and water purification has supported silver’s rapid rise. The expanding solar PV sector, growing at around 12 per cent annually, has particularly boosted demand in Asia.

The gold-to-silver ratio, a key market metric, currently stands at over 90:1, signalling that silver remains undervalued relative to gold and encouraging investor rotation.

Domestic retail demand has surged ahead of the festive season, with gold ETFs rising 82 per cent year-on-year to Rs 62,452.94 crore by June 2025. Pre-budget buying and silver ETF folios have also contributed to the record highs.

Experts caution investors to approach carefully: while gold and silver offer diversification and inflation protection, overexposure could lead to higher volatility in an already fast-rising market.

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