Why Are Jewellers Worried About Gold Shortage Despite Record Prices?
About the Rising Demand and Market Dynamics
Jewellers across India are expressing growing concern about a potential gold shortage as festival demand surges despite record-high prices. The recent jump in demand is being attributed to the festive season, wedding rush, and a perception that prices may rise even further.
In the Mumbai spot market, gold gained ₹692 per 10 grams on Tuesday to close at an all-time high of ₹1,19,941 per 10 g, up from ₹1,19,249 on Monday, according to the Indian Bullion and Jewellers Association (IBJA). On the Multi Commodity Exchange (MCX), December gold futures climbed to ₹1,21,090 per 10 g.
In the global market, gold touched a fresh high of $4,006.12 an ounce as of October 7. The spike comes amid safe-haven buying, rising inflationary pressures, and geopolitical tensions that continue to support gold’s status as a secure investment.
According to N Anantha Padmanaban, Chairman of NAC Jewellers, “Gold is now in demand more for investment than jewellery.” This shift reflects changing consumer behavior where buyers increasingly view gold as a wealth-preserving asset.
Festive Rush and Pre-Bookings Surge
Market sentiment remains upbeat with Dhanteras and the wedding season around the corner. Jewellers report that customers are pre-booking gold to hedge against further price rises, with expectations that this year’s Dhanteras may be one of the best in recent times.
Kumar Jain, IBJA spokesperson, noted that “customers with weddings in the family are rushing to buy jewellery as they fear prices will firm up further.” The trade expects the gold supply situation to tighten if the current trend continues.
The premium on gold has now jumped to $8–13 per ounce (28 g), a sharp reversal from last month’s $8 discount. This indicates a strong shift in market sentiment and tightness in supply.
CA Surendra Mehta, IBJA National Secretary, highlighted that silver and gold are now commanding a premium of ₹4,000 and ₹8,000–10,000 per kg respectively, underlining how physical scarcity is already reflecting in pricing.
Market Experts on the Outlook
Saurabh Gadgil, Chairman and MD of PNG Jewellers, said the festival sentiment is highly optimistic and the current season could outperform last year’s demand both in volume and value terms.
According to Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, the ongoing surge in gold demand is a classic example of “emotional buying meeting investment logic.” He observes that as gold crosses psychological levels, retail investors often fear missing out, which further accelerates short-term price movements. “However, investors should stay cautious and avoid chasing momentum. Diversification is key in volatile times like these,” he added.
Meanwhile, traders are also monitoring the impact of global inflation, interest rate cues, and central bank gold purchases that continue to drive long-term pricing trends.
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Two weeks into October, the bullion market remains alert. If global cues stay firm, analysts foresee prices stabilizing near ₹1,22,000 per 10 g by Diwali unless physical shortages intensify further.
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💡 Investor Tip: Avoid impulsive gold buying during peaks. Accumulate gradually or consider sovereign gold bonds for safer, long-term participation without physical delivery risks.
Investor Takeaway
India’s gold market is witnessing renewed vigor despite record prices. While jewellers anticipate tight supply and higher premiums, disciplined investors can leverage this phase to assess portfolio diversification rather than speculate on short-term movements.
Gulshan Khera, CFP®, from Indian-Share-Tips.com, reminds investors that gold remains a strategic hedge—not a daily trading instrument—and should complement, not dominate, your financial plan.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
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