Gold prices in Hyderabad have reached an all-time high, driven by global market volatility and local festive demand. On Saturday, the price of 24-carat gold surged to Rs 79,420 per 10 grams, while 22-carat gold followed at Rs 72,800. The rise is partly due to international uncertainties, including the upcoming U.S. elections, which have pushed investors toward safer assets like gold.
Gopi Krishna Manepally, Managing Director of Manepally Jewellers, highlighted that demand for gold has dropped by 30% compared to previous years, as buyers wait to see if prices stabilize. However, with Diwali, Dhanteras, and the wedding season approaching, many are still expected to purchase, albeit more cautiously. Buyers are opting for lighter, simpler designs or gold coins and bars.
Over the past week, prices have seen consistent upward movement, with small daily fluctuations reflecting both global and local economic factors. The surge has made gold more expensive for Hyderabadis during the festive season.
Gold prices in Hyderabad have surged to unprecedented levels, crossing the Rs 79,000 mark per 10 grams, a milestone that has sent ripples across the city’s markets. This rise has been fueled by a combination of global economic uncertainties, local festive demand, and shifting market dynamics. On Saturday, October 19, 2024, the price of 24-carat gold hit Rs 79,420 per 10 grams, while 22-carat gold followed closely at Rs 72,800. As Hyderabad prepares for key festivals such as Diwali and Dhanteras, along with the bustling wedding season, this surge has caught the attention of consumers, traders, and investors alike.
Festive Season Meets Price Surge
Hyderabadis have a deep-rooted cultural connection to gold, particularly during the festive season when buying gold is seen as auspicious. Festivals like Diwali and Dhanteras are considered ideal times for purchasing gold, symbolizing wealth and prosperity. Similarly, the wedding season, which follows closely after the festive period, fuels the demand for gold as families prepare for lavish ceremonies, where gold jewelry plays a pivotal role.
This year, however, the soaring gold prices have created a dilemma for buyers. Many are caught between the cultural significance of purchasing gold and the financial strain posed by the skyrocketing prices. What was once a joyous and traditional activity has now become a more calculated decision, with customers adopting a cautious approach to their purchases.
“The glitter of gold has never felt heavier on the pockets of Hyderabadis,” noted a local jeweler. This sentiment echoes across the city as buyers weigh their options, many opting for lighter and simpler jewelry pieces or even gold coins and bars, which offer more value for money compared to ornate designs.
Global Factors Driving Prices Up
The surge in gold prices is not limited to Hyderabad or India alone. It is part of a larger, global trend driven by economic uncertainties and geopolitical tensions. One of the key factors contributing to the rise is the upcoming U.S. elections, which have introduced significant volatility into global markets. According to Gopi Krishna Manepally, Managing Director of Manepally Jewellers, the uncertainty surrounding the U.S. elections has made gold a more attractive option for investors. “If the election results align with market expectations, we might see prices stabilize. But if the outcome surprises, we could witness further escalation in gold prices,” he said.
Beyond the U.S. elections, other global factors have also played a role in the gold price surge. Ongoing geopolitical tensions, particularly in the Middle East, have spurred global demand for safe-haven assets like gold. Additionally, concerns over inflation and fluctuating currency values have prompted investors to flock to gold as a hedge against these uncertainties. Central banks around the world have been buying gold as a way to diversify their reserves, further tightening supply and pushing prices higher.
In this context, the consistent increase in Hyderabad’s gold prices reflects these global market dynamics. Over the past ten days, gold prices in Hyderabad have climbed steadily, mirroring international trends. For instance, on October 18, the price for 24-carat gold was Rs 78,980 per 10 grams, up from Rs 77,400 on October 15, reflecting the influence of both local and international factors.
The Local Market’s Response
Despite the rising prices, the demand for gold in Hyderabad has not entirely disappeared, though it has shifted. As Manepally explained, there has been a noticeable decline in demand compared to previous years. “We’ve seen a drop of about 30% in gold purchases compared to the same period in previous years,” he said. This decrease can be attributed to a wait-and-watch approach among buyers, many of whom are hoping for a dip in prices before making their purchases.
However, with the festive and wedding season approaching, many Hyderabadis are still expected to make purchases, albeit more cautiously. Jewelers across the city have noted that customers are increasingly opting for simpler, lighter pieces of jewelry rather than the heavy, ornate designs that were once popular. Some are choosing to invest in gold coins and bars instead of jewelry, viewing these purchases as safer, more liquid investments in the current economic climate.
Additionally, customers are making more calculated decisions when it comes to their gold purchases. Many are paying close attention to the daily price fluctuations, which have become more pronounced in recent weeks. For example, on October 17, the price of 24-carat gold in Hyderabad was Rs 78,110 per 10 grams, a modest increase from Rs 77,890 on October 16. These small daily fluctuations are a reflection of the global gold market’s volatility, which in turn impacts local markets.
A Rollercoaster of Prices
The rollercoaster ride in gold prices has been evident in Hyderabad over the past month. Starting in early October, gold prices were relatively stable, with only minor fluctuations. On October 10, the price of 24-carat gold stood at Rs 76,640 per 10 grams, while 22-carat gold was priced at Rs 70,250. However, by mid-October, prices began to climb sharply, influenced by rising international demand and geopolitical tensions.
On October 11, prices surged by a significant margin, with 24-carat gold reaching Rs 77,400 per 10 grams and 22-carat gold rising to Rs 70,950. The upward trend continued over the next few days, with prices reaching Rs 77,670 for 24-carat gold on October 13 and Rs 71,200 for 22-carat gold. This steady rise was punctuated by small daily fluctuations, as seen on October 14 and 15, when prices briefly dipped before resuming their upward trajectory.
By October 18, the price of 24-carat gold had risen to Rs 78,980 per 10 grams, marking one of the steepest increases in recent weeks. The trend culminated on October 19, when the price hit the unprecedented Rs 79,420 per 10 grams, setting a new all-time high in Hyderabad.
Impact on Hyderabad’s Gold Market
The surge in gold prices has had a noticeable impact on Hyderabad’s gold market. Jewelers have reported a decline in foot traffic, with customers appearing more hesitant to make purchases at these higher price points. Those who are buying are doing so with a more pragmatic mindset, opting for smaller, more affordable items rather than splurging on large, expensive pieces.
Additionally, the rise in gold prices has sparked conversations about alternative investment options. Some buyers are considering whether to invest in digital gold or gold-backed exchange-traded funds (ETFs), which offer a way to invest in gold without the need for physical storage. These digital options also provide greater liquidity, allowing investors to buy and sell gold more easily in response to market conditions.
Despite the high prices, the festive and wedding seasons are expected to sustain demand to some extent. As Manepally pointed out, “Many buyers will still go ahead with their purchases, especially those who view gold as an essential part of their celebrations.” However, the overall sentiment remains one of caution, with buyers hoping that prices might ease after the festive season.
The recent surge in gold prices in Hyderabad, which has crossed the Rs 79,000 mark for 24-carat gold, is a reflection of both local and global market dynamics. Driven by global uncertainties, including the upcoming U.S. elections and geopolitical tensions, the price of gold has been on a steady upward trend. While this has led to a more cautious approach among buyers in Hyderabad, the cultural and emotional significance of gold during the festive and wedding seasons means that demand is unlikely to disappear entirely.
As the city gears up for Diwali, Dhanteras, and the wedding season, the glitter of gold may feel heavier on the pockets of Hyderabadis, but it remains an integral part of their celebrations. Whether prices will stabilize or continue to rise depends largely on global economic conditions, leaving both buyers and sellers in Hyderabad in a state of anticipation.