Gold and Silver Prices Hit Record Highs: Traders Explain the Reasons
Jewelry traders have explained the unprecedented rise in gold prices, with both gold and silver reaching all-time highs. This sharp increase has shocked buyers and raised questions about whether prices will continue to rise or eventually fall.
Jayantilal, President of the Chennai Gold and Diamond Traders Association, said that earlier price increases were driven by factors such as war tensions and global health crises. However, the current surge is mainly due to an escalating global trade war.
He explained, “Since the day the trade war began, gold prices have been rising sharply. A major concern is a US warship heading toward Iran. If it reaches there and even a minor incident occurs, gold prices will increase further. If a war breaks out, the US economy could face a major decline, leading to a fall in the value of the dollar. Because of this, people are increasingly investing in gold instead of the dollar.”
He added that this strong shift toward gold is pushing prices up in the international market, with little chance of a decline. “Earlier, whenever gold prices rose, there would be a correction — for example, a rise of ₹1,000 would be followed by a drop of around ₹200. This time, such a correction is unlikely. The main reason is that central banks of many countries are now major investors.”
According to him, many countries have converted their foreign exchange reserves, especially US dollars, into gold. “Since central banks and national treasuries are holding this gold, it will not return to the market for resale. Therefore, gold prices are expected to continue rising to unimaginable levels,” he said.
Following gold, silver prices are also expected to increase significantly. “Whenever gold prices rise, consumers tend to become cautious. The same trend is being seen now. People are likely to wait until prices stabilize before making investments or purchases,” he added.
He also noted that last year, the central government reduced the import duty on gold from 15% to 6%. “We have requested a further reduction this year as well, but the chances of this happening in the upcoming budget are low,” he said.
