Gold rates soar past ₹77,000 per sovereign in Kerala amid Onam rush

Gold price in Kerala continued the record-breaking run for the third consecutive day, hitting a new all-time high of ₹77,640 per sovereign after a sharp rise of ₹680 on Monday. The surge comes ahead of the Onam purchases, raising concerns about consumer sentiment. However, jewellers do not expect it to dent revenues as higher prices offset lower purchase capacity. 

The price of a gram of gold also registered an increase of ₹85 to ₹9,705, according to the All Kerala Gold and Silver Merchants Association, which determines the daily rate of the yellow metal in the state. 

The spike is attributed to the depreciation of the rupee against the dollar, which slipped by 17 paise to 88.26 in early trade on Monday. Moreover, expectations that the US Federal Reserve will cut its benchmark interest rate have pushed gold prices higher in international markets.

Gold rates in Kerala closely follow the heels of global market trends and domestic factors such as the rupee’s value. Interest rates and gold prices share an inverse relationship — when interest rates fall, gold prices typically rise. As a result, investors push their money into gold, raising the prices. 

As a result, the bullion rates in international markets rose to $3,470.69 per ounce, hitting its highest since April 23, according ot Reuters. Meanwhile, the silver price rose above $40 per ounce for the first time in more than a decade.

The price of silver also touched a record high in Kerala, rising to ₹133 per gram. Meanwhile, 18-karat gold reached a new peak of ₹8,030 per gram, according to AKGSMA.