Chennai residents saw gold prices climb further on Thursday in tandem with the global rally. The cost of 22-karat gold in the city now stands at Rs 9,230 per gram, while 24-karat gold is retailing at Rs 10,075 per gram.
The upward swing mirrors the performance of international benchmarks. Comex gold futures hit a record $3,534.10 per ounce on August 7 and, according to Ventura Securities, are expected to reach $3,600 by December. In India, October contracts on the MCX surged to a lifetime high of Rs 1,02,250 per 10 grams on August 8, underscoring the bullish momentum in the market.
ETF Inflows and Central Bank Buying Boost Sentiment
Ventura Securities noted that “Gold retains upside potential with pronounced volatility, supported by weaker US growth, sustained pressure on the US dollar index, trade frictions and heightened geopolitical risks.”
Much of the demand growth has been driven by institutional inflows. Global ETF holdings rose 16 per cent to 3,616 tonnes by the end of June, while assets under management leapt 64 per cent year-on-year to $383 billion.
Central banks, including the Reserve Bank of India, have been steady buyers of gold. However, since the RBI halted new issuances of Sovereign Gold Bonds from February 2024, analysts expect ETFs and digital investment avenues to absorb more demand.
India’s Growing Appetite for Gold
In the domestic market, India has mirrored these global shifts. Local ETF holdings climbed 42 per cent to 66.68 tonnes, with AUM almost doubling to Rs 64,777 crore. Investor accounts increased 41 per cent, reaching 76.54 lakh. Interestingly, over the last four years, investor participation has grown more than three-fold, reflecting a deepening retail interest.
While younger investors lean towards digital platforms and fractional ownership, physical jewellery demand remains resilient. In cities like Chennai, where gold is deeply woven into tradition and festivities, families continue to combine investment needs with cultural buying, often blending physical purchases with online orders.
Performance data cements its appeal. Gold has offered average annual returns of 23 per cent over the last three years, surpassing the Nifty 50’s 11 per cent. Over the longer 20-year horizon, it has delivered positive annual gains in 14 out of 20 years, reinforcing its credibility as a hedge against inflation and economic uncertainty.
For buyers in Chennai, Thursday’s surge reinforces gold’s enduring status — not just as a financial safeguard, but also as a vital part of cultural heritage.
