Fears of a gold shortage in the physical market have gripped jewellers following a surge in demand as prices of the precious metal continue to reach new highs in both global and domestic markets.
With gold prices climbing daily, consumers are rushing to purchase jewellery at the lowest possible price. N. Anantha Padmanaban, Chairman of Chennai-based NAC Jewellers, noted, “Gold is in demand more for investment than jewellery.” On Tuesday, gold prices rose by ₹692 per 10 grams, closing at ₹1,19,941 in the Mumbai spot market, an increase from ₹1,19,249 on Monday, according to data from the Indian Bullion and Jewellers Association (IBJA). Over the last six trading sessions, gold has gained ₹6,679 per 10 grams, with December futures on the MCX rising to ₹1,21,090 per 10 grams.
In international markets, gold reached a new high of $3,985 per ounce, while December futures on Comex exceeded $4,000, priced at $4,006.12 as of 6:45 PM IST.
Kumar Jain, National Spokesperson for the IBJA, stated that customers with upcoming weddings are hurrying to buy jewellery at whatever cost, fearing that prices will continue to rise. Furthermore, he expressed optimism that Dhanteras will be a particularly strong season, as many consumers are pre-booking purchases to mitigate future price hikes during the festival.
Jain indicated that if the current demand trend persists, a gold supply shortage could occur, despite stable supply levels at present. Currently, premiums on gold range from $8 to $13 per ounce (28 grams), marking a significant shift from an $8 discount seen at the same time last month.
CA Surendra Mehta, National Secretary at IBJA, reported that both silver and gold are commanding premiums of ₹4,000 and ₹8,000-10,000 per kg, respectively. Saurabh Gadgil, Chairman and Managing Director of PNG Jewellers, noted that the festive sentiment is strongly optimistic, with demand expected to surpass last year’s figures in both volume and value. The demand for gold coins, bars, bangles, necklaces, and diamond jewellery remains robust.
Renisha Chainani, Head of Research at Augmont, observed that gold imports have slowed due to rising global prices, currency volatility, and supply bottlenecks. “Refiners and large traders are holding limited stocks, leading to a supply-demand mismatch,” she explained, emphasizing that the rise in spot premiums reflects prevailing demand despite high price levels.
The surge in gold prices has been fueled by the continuing US government shutdown and ensuing economic uncertainty. The shutdown, which has entered its second week, has halted essential federal operations, including air traffic and visa services. The deadlock over funding bills and health insurance subsidies triggered the shutdown on October 1.
Darshan Desai, CEO of Aspect Bullion & Refinery, remarked that gold prices have reached record highs, with futures hitting $4,000 per ounce on the Comex. This increase coincides with the prolonged US government shutdown and political instability in France, contributing to global market uncertainty. He noted a combination of retail and institutional buying, alongside persistent hopes for a Federal Reserve rate cut, maintaining elevated gold prices.
Desai added that any potential retreat in gold prices from these peaks could represent a buying opportunity for investors looking to enter the market.
Published on October 7, 2025
