Gold prices in Chennai surged to unprecedented levels on Thursday, ahead of the Dhanteras festival, reflecting the heightened demand as buyers look to invest in auspicious jewellery. The current gold rate in Chennai stands at Rs 11,900 per gram for 22-karat gold, while 24-karat gold (999 purity) is priced at Rs 12,982 per gram. India, the second-largest consumer of gold globally after China, relies heavily on imports to meet domestic requirements, with recycled gold contributing only a small fraction of the supply. Since gold is traded internationally in US dollars, fluctuations in the rupee-dollar exchange rate directly influence local pricing.
Domestically, gold remains costlier than international benchmarks due to import duties, Goods and Services Tax (GST), and additional state-specific levies. Jewellery and bullion prices in Chennai reflect these extra charges, making the precious metal a premium investment. Globally, gold’s valuation is impacted by bond yield movements, central bank monetary policies, and investor sentiment. Its enduring reputation as a safe-haven asset maintains robust demand, particularly during periods of economic uncertainty or geopolitical tensions.
Investment Sentiment Drives Demand
Market experts note that gold continues to attract investors seeking long-term financial security amid volatile market conditions. The run-up in prices ahead of Dhanteras is indicative of seasonal buying, as the festival traditionally prompts Indians to purchase gold for auspicious reasons. As a result, local jewellers and bullion traders report strong footfall, with consumers favouring both 22-karat and 24-karat gold.
In addition to Chennai, gold rates in other major cities exhibit similar trends. Delhi’s 22-karat gold is priced at Rs 11,880 per gram, while Mumbai and Bengaluru show 22-karat gold at Rs 11,865 per gram. Hyderabad and Kolkata match these rates, reflecting nationwide demand. Economic analysts assert that the combination of global price movements, a weakening rupee, and domestic festive buying is contributing to the record highs witnessed across India.
