Gold prices breached the ₹1 lakh mark per 10 grams on Wednesday in the national capital, marking a sharp upward surge in domestic bullion markets, driven by rising geopolitical tensions between India and Pakistan. The escalation, triggered by India’s military response to the Pahalgam terror attack, has prompted a noticeable shift in investor sentiment toward safe-haven assets, particularly gold.
According to the All India Sarafa Association, the price of gold with 99.9 percent purity rose by ₹1,000, reaching ₹1,00,750 per 10 grams, up from ₹99,750 a day earlier. Gold with 99.5 percent purity also saw a similar spike, climbing by ₹1,050 to touch ₹1,00,350 per 10 grams. The surge signals increased domestic demand for bullion amidst heightened uncertainty.
This development follows retaliatory missile strikes by India on terror infrastructure reportedly located in Pakistan and Pakistan-occupied Kashmir (PoK). Military targets included the Jaish-e-Mohammad base in Bahawalpur and the Lashkar-e-Taiba centre in Muridke, two groups that New Delhi has long accused of perpetrating cross-border terror activities. These events have pushed investors to seek shelter in traditional hedges like gold.
Earlier, gold prices had set a record of ₹1,01,600 per 10 grams on April 22, marking the highest domestic valuation amid persistent inflation concerns and previous bouts of global instability.
Silver prices also followed the upward trajectory, gaining ₹440 on Wednesday to reach ₹98,940 per kilogram, up from ₹98,500 on Tuesday. The rally in silver, though moderate compared to gold, reflects similar underlying anxiety in the commodities market.
Despite the domestic upswing, global gold prices showed a contrasting trend. In international markets, spot gold fell 1.8 percent to USD 3,369.65 per ounce, reacting to tempered fears over macroeconomic uncertainties. The easing was attributed to fresh optimism surrounding the US-China trade negotiations, which dampened demand for the metal globally.
Spot silver in international trade also slipped, declining by 1.24 percent to USD 32.81 per ounce, reflecting a similar response among global investors anticipating less severe risk scenarios than earlier projected.
Analysts say the divergence between domestic and global trends is rooted in regional political volatility and currency fluctuation factors. While the international gold market is more responsive to macroeconomic data, interest rate cues, and diplomatic signals, India’s gold pricing structure is heavily influenced by geopolitical concerns, especially those relating to its immediate neighbors.
The Indian rupee’s relative performance has also played a role in amplifying domestic bullion rates. Any weakening in the currency tends to inflate gold prices, as the country relies heavily on imports to meet its demand. The heightened tension has added pressure on the rupee, increasing the cost of gold in local markets despite the global price fall.
The current situation highlights the long-standing trend of Indians turning to gold as a hedge against uncertainty—be it economic or political. Gold remains deeply embedded in the country’s cultural and financial fabric, serving both ornamental and investment purposes.
Bullion traders across Delhi, Mumbai, and Kolkata reported a significant increase in footfall this week, with retail investors and institutional buyers alike looking to secure physical gold amid fears of further instability in the region. Jewellers and traders have cited panic buying, which has helped sustain the steep premium over international benchmarks.
Experts suggest that unless there is a de-escalation of military tensions between the two countries, the bullish momentum in domestic gold prices is likely to continue, possibly breaching earlier record levels once again.
Market strategist Anupam Sen of Delhi-based Capital Bullion Associates stated, “Geopolitical flashpoints typically translate into immediate gains for gold, and the situation with Pakistan has pushed India’s bullion markets into overdrive. Unless there’s a reversal or diplomatic breakthrough, we expect prices to test new highs.”
Meanwhile, the Reserve Bank of India (RBI) is expected to keep a close watch on currency movements and inflation metrics, both of which are impacted by rising gold imports. Any significant increase in gold imports over the next quarter could widen India’s current account deficit, prompting monetary interventions.
Retail investors are advised to assess the situation cautiously. While gold has traditionally delivered stability during volatile times, price corrections can follow once the tensions subside or global sentiment shifts. Financial advisors recommend diversifying investment portfolios rather than responding emotionally to geopolitical shocks.
India remains one of the largest consumers of gold globally, second only to China. However, unlike previous years where gold demand peaked during festive or wedding seasons, the current spike is almost entirely driven by uncertainty and risk aversion, marking a non-seasonal rally.
As the military operations and diplomatic exchanges between New Delhi and Islamabad unfold, the bullion market is expected to remain volatile. Any further strikes or retaliatory action could further strengthen the gold rally in India, even if the global market takes a divergent course.
The contrasting movement between domestic bullion markets and global trends also puts pressure on policy planners, especially as the Indian government has been attempting to reduce the country’s reliance on gold imports through financial instruments like Sovereign Gold Bonds (SGBs) and Gold Monetisation Schemes (GMS). However, during times of crisis, physical gold continues to dominate consumer preferences.
If diplomatic backchannels fail to cool the tensions, analysts project that prices may surpass the ₹1,02,000 threshold, setting a new all-time high in the near term. As for silver, despite its industrial utility and dual use as a precious metal, its price movements tend to be less dramatic compared to gold. However, with global supply chain disruptions and rising commodity costs, even silver may see continued support in the near future.
Investors should monitor developments closely, as the next moves by both governments will significantly shape not just gold and silver prices, but also broader market sentiment in the region. Gold’s upward movement in India, despite a global downturn, is a stark reminder of how regional conflicts continue to influence local market dynamics, reinforcing the metal’s long-held status as a refuge in times of uncertainty.
