Mumbai, Aug 9 Indian bullion prices ended marginally higher this week amid global market cues and higher festive demand.
Despite the short-term dip, gold continues to price in the broader impact of trade tariff uncertainty and dollar weakness, keeping the overall trend supported. Gold is expected to trade in a volatile range of Rs 99,000 to Rs 1,01,500, analysts said.
The price of 24-carat gold (10 gram) started the week at Rs 1,00,167 on Monday, rose to Rs 99,017 on Wednesday, and ended the week at Rs 98,534, according to data published by the India Bullion and Jewellers Association (IBJA).
"Gold prices traded volatile, with rupee weakness supporting domestic prices, as MCX Gold settled at Rs 1,01,180 with gains of Rs 350, while Comex gold hovered around $3390 in a tight range between $3380 to $3405. Going ahead, prices are expected to remain choppy as Trump's tariff stance continues to create uncertainty, especially with the India deal appearing off the table for now. Any positive movement in the rupee could limit gold’s upside,” said Jateen Trivedi from LKP Securities.
India's wealthiest households hold nearly 60 per cent of their financial assets in physical assets like real estate and gold, according to a report from Bernstein.
Large trade and budgetary deficits are straining the US, which threatens the dollar's reserve currency status. Gold is the only plausible alternative attracting reserve flows. Global foreign exchange reserves are $12.5 trillion, while India holds 15 per cent of the $23 trillion global gold market. A 5 per cent transfer of global reserves towards gold might spark a huge price surge, according to analysts.
The RBI forecast 3.1 per cent CPI inflation for FY2025-26, citing the sustained rainfall and strong kharif sowing, while food prices remain low.
Unfavourable base effects and policy-induced demand side effects will likely push CPI inflation beyond 4 per cent by the end of FY26. An increase in gold prices helped boost core inflation to 4.4 per cent in June from 4.1-4.2 per cent in February-May, the RBI said.
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