Gold price hits all-time record high in Kerala, crosses ₹75,000 per sovereign for first time

Gold prices in Kerala hit an all-time high on Wednesday, crossing the ₹75,000-mark per sovereign for the first time ever. A sovereign of gold (8 gm) now costs ₹75,040 in the state, an increase of ₹760 from Tuesday's rate, adding to the burden of consumers looking to buy the precious metal.

The surge in gold prices is attributed to a rise in bullion rates in international markets, driven primarily by uncertainty surrounding US trade negotiations with the European Union and other countries, as well as weakening US bond yields. Taking cue from these global trends, gold prices climbed worldwide, with the effects quickly felt in domestic markets.

In Kerala, the price of gold per gram touched a record ₹9,380— the highest since June 14, when it was ₹9,320 per gram, according to All Kerala Gold and Silver Merchants Association (AKGSMA), which determines the daily gold rates in the state. At that time, a sovereign was priced at ₹74,56— a record that has now been eclipsed.

"Global uncertainty has spurred gold prices in Kerala. Ongoing wars and trade negotiations have driven rates higher," Dr B Govindan, chairman of AKGSMA, told Onmanorama. However, he added that if global prices ease during early trading sessions, the impact will likely be reflected in local rates as well. 

His comments came after international gold prices recorded a slight decline to $3,422 per ounce, after the US struck a trade deal with Japan. 

However, market uncertainty persists as the US is yet to finalise trade agreements with other major economies, including the European Union and China. Additionally, US bond yields dipped to a two-week low, prompting investors to shift towards gold as a safer investment, pushing prices higher.

Gold is traditionally viewed as a safe-haven asset during times of economic and geopolitical instability. Morevoer, Indian Rupee had a muted start on Wednesday, opening 4 paise lower at 86.40 against dollar, making gold costlier for domestic buyers, further pushing rates. 

The price of a gram of 18 karat gold also rose by ₹80 to ₹7,730. The price of a gram of silver also rose by ₹1 to ₹127, according to AKGSMA. 

However, for consumers, buying gold becomes even more expensive due to additional costs, including a 3 per cent GST, a hallmarking fee of ₹53, and making charges, which vary depending on the type of jewellery and the jeweller.