India, the world’s second-largest consumer of gold after China, continues to rely heavily on imports to satisfy its strong domestic demand for the yellow metal. Despite ongoing efforts to strengthen gold recycling and formalise collection channels, the share of recycled metal in total supply remains relatively low. This underlines the country’s persistent dependence on global supply chains to meet its internal needs.
Rupee Movement and Global Trends Drive Domestic Prices
Gold is traded globally in US dollars, which means that any fluctuation in the rupee’s exchange rate directly affects domestic prices. A weaker rupee pushes up the cost of imported gold, making the metal more expensive for Indian buyers. At the global level, several macroeconomic factors, including bond yields, monetary policy decisions by major central banks, and changing investor sentiment, play a key role in determining the trajectory of gold prices.
On Friday, gold prices remained largely muted as investors weighed mixed economic signals and awaited cues from major central banks. The lack of strong momentum in global markets translated into subdued trading activity in India as well.
Chennai Gold Rates Hold Firm Amid Global Uncertainty
In Chennai, 24-karat gold (999 purity) was priced at Rs 12,295 per gram, while 22-karat gold stood at Rs 11,270 per gram. The rates remained largely unchanged compared to the previous session, mirroring the steady global trend. Analysts noted that steady domestic demand, supported by the jewellery and retail sectors, is helping maintain market balance even as international cues remain soft.
Experts point out that gold’s status as a safe-haven asset continues to attract investors during times of economic uncertainty and inflationary pressure. Meanwhile, stable crude oil prices and consistent consumer sentiment in India are offering additional support. The metal’s performance over the coming weeks will likely depend on shifts in global monetary policy, the rupee’s movement, and seasonal buying trends.
As the festive and wedding seasons approach, jewellers in Chennai expect an uptick in physical gold demand, which could lend mild upward pressure on prices. However, analysts also caution that any sudden appreciation in the rupee or firming bond yields abroad may keep gains in check.
