Gold and silver prices are being shaped by global economic trends, industrial demand, and central bank buying, not just seasonal jewellery consumption.
Gold and silver continue to attract retail investor interest, but the drivers behind their prices extend well beyond seasonal demand.
As of Thursday, 24-carat gold was priced at ₹10,255 per gram, while silver stood at ₹117 per gram.
SEBI-registered research analyst Sumesh Guleria said a common misconception among Indian investors is that jewellery demand is the primary factor driving precious metal prices.
In reality, global macroeconomic trends, industrial demand, and central bank activity are playing a far larger role.
In gold’s case, Guleria said roughly 50% of global demand comes from jewellery, but 23% is from investments, often used as a hedge against uncertainty, while 21% comes from central banks like the RBI and others around the world.
He noted that after the U.S. froze Russia’s dollar reserves, other countries ramped up gold buying to reduce dependence on the dollar, fearing similar sanctions.
High inflation and economic volatility since the COVID-19 pandemic, including policy shifts like Donald Trump’s tariffs, have also pushed global investors toward gold, he added.
Turning to silver, Guleria said it’s “an industrial metal first,” with 50% of demand tied to industrial use, including solar energy and electric vehicles (EVs). Only 22% comes from jewellery, while 20% comes from investment demand.
The analyst pointed out that EVs consume 25–50 grams of silver per vehicle, compared to 18–34 grams in internal combustion engine (ICE) vehicles, and 1 GW of solar capacity requires about 30 metric tonnes of silver.
Guleria also said gold and silver typically move in the same direction due to their historical price correlation, adding that investor sentiment often treats them as part of the same asset class.
“Jewellery demand is just one piece of the puzzle,” Guleria said. “Understanding these deeper drivers can help retail investors make more informed decisions, beyond the seasonal hype.”
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