Why Gold Prices Are Rising—And What It Means for Your Jewellery Box

Gold has always held a special place in the global economy, but the past year has been particularly dramatic for the precious metal. By mid-October 2025, gold was trading around ₹1.28 lakh per 10 grams – over 60% higher than a year earlier.

From breaking record after record to experiencing a notable cooldown, gold's price trajectory has kept investors, economists, and jewellery lovers on their toes. For India—the world's second-largest gold consumer—these fluctuations have had profound implications on everything from wedding budgets to investment strategies.

If you've been eyeing that gorgeous gold necklace or a pair of statement earrings lately, you've probably experienced some serious shock with the price. Gold has been on quite the rollercoaster ride, and we're all just trying to hold on!

So grab your chai (or coffee, we don't judge), and let's dive into gold's dramatic journey—and what it really means for jewelry lovers like us.

When Gold Went Absolutely Wild: The Great Price Surge

The rally in gold prices through 2025 was nothing short of extraordinary. For example, the Economic Times notes gold climbed from about ₹78,500 on Dhanteras 2024 to ₹1,29,580 on Dhanteras 2025 (a 66% jump), driven by “robust global demand, currency weakness, inflation, and central bank diversification”. Several powerful forces converged to drive this remarkable ascent:

• Central Banks Were Literally Hoarding Gold: Central banks worldwide, particularly in emerging markets, went on an unprecedented gold-buying marathon. Countries seeking to diversify away from dollar-denominated assets and reduce exposure to geopolitical risks accumulated gold reserves at rates not seen in decades. This institutional demand created a solid floor under prices.
• The World Got... Complicated: Between global conflicts, economic uncertainty, and general chaos, people remembered what humans have known for thousands of years. From ongoing conflicts in Eastern Europe and the Middle East to rising US-China tensions, global uncertainty made gold's safe-haven appeal irresistible. When traditional assets seem risky, investors historically flock to gold's stability.
• Monetary Policy Expectations: Anticipation of interest rate cuts by major central banks, including the Federal Reserve, fueled gold's rally. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive relative to bonds and savings accounts.
• Weakening Dollar Phases: During periods when the US dollar softened, gold became cheaper for holders of other currencies, spurring international buying that pushed prices higher.
• Inflation Hedging: Persistent inflation concerns, despite central banks' efforts, reminded investors why gold has served as a wealth protector for millennia.

All these factors together explain why gold jumped to record highs. In India, gold prices even rose on nearly every trading day in 2024. For example, geopolitical news and a surprise Fed rate cut in late 2024 helped push domestic prices briefly above ₹78,000/10g. Overall, gold has outperformed nearly all assets: Reuters reports gold up ~54–58% globally in 2025 so far.

The Cooling Off: Why Gold's Momentum Slowed

Just when we thought gold was going to keep climbing to infinity and beyond, something interesting happened—it took a breather. After reaching those dizzying heights in late 2024, gold's ascent began to lose steam. By September 2025, gold prices of 24-carat gold reached an all-time high of ₹78,245 per 10 grams. prices had pulled back from their peaks, trading in a more subdued range.

What changed?

• Rate-Cut Expectations Priced In. By late 2025, many investors expect the Fed to actually cut rates, which the market had already priced into gold. Once the Fed started cutting rates (as it did in late 2025), gold’s upward momentum lost some steam. In other words, some of the “fuel” behind the rally (betting on Fed cuts) has been burned, so prices have steadied. As Reuters noted, gold surged 27% in 2024 on Fed uncertainty, but as policy evolves, some of that urgency wanes.
• Profit-Taking and Caution. After months of gains, investors and traders have taken profits. Dealers in India report that buyers have paused purchases, waiting for prices to cool. A Reuters report in July 2025 found that Indian gold dealers were “offering discounts” of up to $15/oz above international rates just to find buyers, as retail demand “remained negligible for more than a month”. In short, at current levels, many purchasers are sitting on the sidelines.
• Budget Constraints on Consumers. As prices have jumped, ordinary consumers hit their budget limits. Analysts at the World Gold Council warn that households’ jewellery budgets do not rise at the same pace as gold prices Many buyers who traditionally buy jewellery have simply cut back or postponed purchases.
• Global Market Adjustments. Some of the global drivers (like extreme dollar weakness or runaway inflation) have shown signs of easing. In late 2025, U.S. inflation and employment data suggested a slowing economy, which could temper gold’s surge Meanwhile, any strengthening of the rupee or easing of geopolitical tensions would reduce the urgency to buy gold.

Overall, gold remains elevated, but the frantic pace of rise seen in early 2025 has cooled. After peaking around mid-October 2025, international gold prices have inched sideways, and domestic premiums have stabilised. 

What Experts Predict for Gold

Most analysts still forecast higher gold prices over the next year, though at a gentler pace. Here are some outlooks:

• Reuters Poll (Oct 2025): A survey of 39 analysts sees average gold at $3,400/oz in 2025 and $4,275/oz in 2026. That implies roughly ₹110,000–112,000 per 10g (at current exchange rates), on average in 2026.
• Wells Fargo (Nov 2025): Wells Fargo now expects gold to climb further to $4,500–$4,700 per oz by end-2026. They cite looming Fed rate cuts, rising U.S. debt/inflation, geopolitical turmoil, and central bank demand as key drivers.
• Major Bank Forecasts: Other big banks are similarly bullish. For example, Goldman Sachs has projected gold hitting around $5,055 by late 2026, Bank of America around $5,000, UBS sees $4,700 (bull case), and JPMorgan foresees gold crossing $4,000 by mid-2026.
• Consensus Range: In summary, the consensus target is roughly $4,000–$5,000/oz over the next year (up from ~$4,000 now). If realized, that would set new highs for gold. Analysts point out that continued economic uncertainty and central bank buying could sustain demand.
• Caution: However, most expect the rally to moderate. The same polls note that while gold will likely remain strong, “gains are expected to moderate” compared to 2025’s blistering pace. Factors that could temper prices include a firming U.S. dollar, higher yields, or a ceasefire in major conflicts. But on balance, the longer-term trend for the next 6–12 months is believed to be up.

In short, experts see gold continuing its record run into 2026, potentially peaking around $4,500+/oz by late next year. For Indian investors, this would translate to rupee prices in the ballpark of current highs, assuming the rupee stays between ₹80–85 to the dollar.

Impact on Jewellery Demand and Consumer Behaviour

Gold is deeply tied to Indian culture – weddings and festivals traditionally involve buying gold jewellery. But the price surge is changing how consumers shop. Key trends include:

• Lower Jewellery Volumes. With prices high, many families are buying less gold jewellery. Reuters reported that during Dhanteras 2025, the volume of jewellery sold in India was 10–15% lower than the previous year, even though the value of sales was higher. Jewellery demand was “negatively impacted” – roughly 30% lower than last year – because buyers reached their budgets faster. A World Gold Council expert warns that if prices stay volatile, jewellery demand will suffer.
• Shift to Coins, Bars and ETFs. Many consumers have swapped traditional ornaments for simpler gold investments. Coins, bars and government schemes are flying off shelves. Gold ETFs and Sovereign Gold Bonds (SGBs) have also seen record inflows; India ranked third in the world for ETF inflows in Oct 2025. Younger investors, in particular, are using these “paper gold” options for safety and liquidity. (While weddings still spur physical buying, experts say millennials and Gen-Z prefer digital gold routes nowadays)
• Preference for Lightweight Designs. Buyers are favouring lighter, everyday jewellery instead of heavy, elaborate sets. Retailers note a clear trend toward “lightweight, fashion-forward” gold pieces, often with small diamond or gemstone accents. Plain chains, earrings and bangles that can be worn long-term are in demand. Even long-time customers are exchanging old heirlooms for new designs (trade-ins reportedly rose to ~30% of some stores’ business). Essentially, shoppers want pieces that fit their budgets and modern lifestyles.
• Rise of Alternatives – Lab-Grown Diamonds & Others. To get the “sparkle” without the gold weight, many couples are turning to lab-grown diamonds and precious stones. A wedding-season survey found strong growth in lab-grown diamond purchases, especially for engagement and bridal jewellery, as gold prices jumped ~30–35% year-on-year. One lab-grown diamond retailer even saw 2.5× higher demand than the previous year Similarly, some consumers are buying more silver jewellery or precious gemstone pieces instead of pure gold to stretch their budget.
• Smart Investment Schemes. Jewellery brands are promoting digital and investment products. For instance, “paper gold” plans and silver savings schemes are advertised alongside traditional jewelry. These allow customers to accumulate gold value (with interest or bonuses) without paying high making charges. This reflects a broader move: as India Today notes, the country’s love for gold is being “redefined in the digital era,” with many investors preferring ETFs and SGBs for convenience.

In summary, surging gold prices have clearly dampened traditional jewellery buying volumes, even if the total market value stays strong. Consumers are adapting by buying smaller quantities, lighter designs, and exploring alternatives like lab-grown gems or financial gold. Weddings and festivals still generate some gold spending, but expectations have changed: buyers today “want pieces that align with their personal style and make smart financial sense,” according to a Times of India lifestyle piece

Finding Balance: Gold's New Normal

So here we are—gold has found its equilibrium, the market caught its breath, digested those massive gains, and settled into a more predictable rhythm.

Think of it as gold growing up a bit. The wild party phase is over (for now), and it's entered a more mature, stable relationship with the market. The panic buying has subsided, the world has adjusted to ongoing uncertainties, and everyone's just... watching and waiting.

This stabilisation is actually kind of nice—it means you can plan your jewelry purchases without worrying that prices will jump 10% by next week!

Crystal Ball Time: What's Next for Gold?

Okay, we'll admit it—predicting gold prices is harder than predicting which reels will go viral. But let's explore the possibilities:

• The Optimistic Scenario: If the economy hits some bumps and central banks start cutting rates aggressively, gold could absolutely resume its upward journey. Some analysts are throwing around numbers like $3,000 per ounce. Imagine the possibilities—but also, imagine the price tags!
• The Reality Check: If everything stays relatively stable—decent economy, moderate policies, no major global drama—gold might just hang out in its current range. Not boring, just... comfortable. Like your favorite pair of jeans.
• The Long Game: Here's the thing about gold—it's been precious for literally thousands of years. Short-term fluctuations? Sure. But long-term, it's still the OG store of value. Whether prices go up or down next month, gold isn't going anywhere.

The smart money says expect gold to stay supported (think ₹2,400-₹2,500 per ounce internationally) with some room to dance upward, but maybe not the explosive moves we saw in 2024.

So, What Should You Do?

Whether prices are up, down, or doing the cha-cha, here's our take:

Don't Wait for Perfect: There's no "perfect" time to buy jewelry you love. If a piece speaks to you and fits your budget, that connection matters more than trying to time the market perfectly.

Invest in Timeless: Focus on designs you'll cherish for years. Trends come and go, but a beautifully crafted piece never goes out of style.

Explore Options: From lightweight contemporary designs to gemstone-heavy pieces to innovative gold-saving schemes—there are more ways than ever to build your jewelry collection smartly.

Buy the Experience: Remember, jewelry isn't just about gold content. It's about how it makes you feel, the memories attached to it, the compliments it attracts, and the legacy you create.

The Bottom Line

Gold's price journey has been wild, watching it stabilise feels like we can all exhale now. Whether you're a bride-to-be, a jewellery collector, someone treating themselves, or simply appreciating fine craftsmanship, the landscape has shifted—but the magic of gold jewelry remains unchanged.

Gold’s unprecedented rally in 2023–25 has been driven by a mix of global and local factors – inflation, geopolitics, currency moves and policy. While the bull run is far from over (analysts predict further gains), the rate of increase has eased as markets adjust. For Indian consumers, this means rethinking gold purchases: there’s a clear move toward lighter, affordable jewellery and financial gold products.

Whether gold stays above ₹1.2 lakh per 10g will depend on the global economy and India’s own demand. But one thing is certain: jewellery buyers are now weighing each gold purchase against much higher prices and seeking smarter ways to get that golden shine