Introduction
Gold prices in India have witnessed a sharp drop recently, offering relief to domestic consumers and investors. This shift has stirred both excitement among buyers and concern among industry stakeholders. In this article, we explore why this drop has occurred, its wider implications, and what lies ahead.
Current Gold Price Movement
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On 12 August 2025, MCX gold prices plunged over ₹2,000—24 K gold in Mumbai was around ₹1,01,400 per 10 g.
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Additionally, losses were staggering: a ₹8,000 fall per 100 g (≈₹800 per 10 g) for 22 K, and ₹8,800 drop for 24 K, marking a second such tumble in just a week.
What’s Driving the Drop in Gold Prices?
Global Factors
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A stronger U.S. dollar and profit-booking by traders have put downward pressure on gold rates.
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Easing trade tensions and better global sentiment have reduced safe-haven demand. International gold also dipped ~1% recently.
Domestic and Policy-Related Influences
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Earlier in 2024, import duties were slashed from 15% to 6%, lowering market prices by ₹5,000–6,000 per 10 g.
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The Economic Survey forecasted a 5.1% fall in commodity prices in 2025—including gold.
Who’s Impacted?
Consumers & Buyers
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This drop has spurred demand among buyers eyeing festival or wedding purchases. Physical gold and investment appeal has improved.
Jewelers & Retailers
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Lower prices can boost sale volumes but squeeze margins.
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Exporters, particularly in regions like Gujarat, face headwinds from rising tariffs that suppress demand and complicate operations.
National Gold Demand Trends
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In Q2 2025 (April–June), India’s gold demand dropped ~10% to 134.9 tonnes due to elevated prices, though gold’s value surged ~30%. Jewellery demand slumped 17% even as investment rose.
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Overall, demand in 2025 is projected to fall to a five-year low (~600–700 tonnes) compared to ~802.8 tonnes in 2024.
Expert Opinions & Market Outlook
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Analysts suggest gold may remain range-bound, noting persistent global uncertainties—advising cautious positions.
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Some forecasts see a potential slump of 10% over the next few months; annual corrections might approach 30%.
Should You Buy Now?
Advantages for Buyers:
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Lower prices present a compelling buying window for weddings, festivals, or investment.
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Lower gold prices can mean purchasing more value for your money, especially if rates rebound later.
Risks to Consider:
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Market volatility: price trends can reverse abruptly due to global shifts.
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Export-oriented businesses face added pressure from international tariffs and reduced competitiveness.
Future Outlook for Gold in India
| Timeframe | Outlook |
|---|---|
| Short-term | Expect volatile or sideways movement; gold may correct 10% soon. |
| Medium-term | Prices may stabilize or fall further, supported by improving sentiment and economic cues. |
| Long-term | Physical demand could improve with policy support or post-festive buying surges. |
Conclusion
Gold’s recent price drop in India is the result of intertwined global dynamics—like dollar strength and easing tensions—and domestic policies favoring affordability. While consumers and investors benefit from the dip, jewellers and exporters face mounting challenges. With demand at a multi-year low, the path ahead is tied closely to global markets and policy shifts. Whether you’re buying a wedding set or diversifying your portfolio, timing with strategy remains key.
