Gold price crosses ₹1 lakh per sovereign in Kerala ahead of New Year as demand for safe haven surges

Thiruvananthapuram: Gold prices in Kerala surged to record levels on Tuesday, with the cost of one sovereign (8 grams) crossing the ₹1 lakh mark for the first time this month amid rising global uncertainty and strong safe-haven demand.

The price of 22-carat gold rose by ₹220 per gram to ₹12,700, the highest rate recorded in December so far. With the latest rise, the price of one sovereign jumped from ₹99,840 to ₹1,01,600. The lowest price for 22-carat gold this month was recorded on December 9 at ₹11,865 per gram. The price per sovereign was ₹57,200 on January 1 this year. Since then, it has risen by ₹44,400 so far in 2025.

As per jewellers, 24-carat gold is priced at ₹13,855 per gram in Kerala, while 18-carat gold is trading at ₹10,391 per gram. Silver prices also witnessed a sharp rise, touching the highest level this month. The price of silver increased by ₹3,000 to ₹2,34,000 per kilogram (₹234 per gram).

Market analysts attribute the rally in gold and silver to a combination of global economic uncertainty, easing interest rates in the US, and geopolitical tensions. According to experts, investor interest in both gold and silver has grown significantly as US interest rates trend lower, fiscal concerns mount, and uncertainty clouds the American economy. These factors have prompted investors to shift towards traditional safe-haven assets. Escalating geopolitical tensions have further strengthened demand for precious metals.

Meanwhile, Renisha Chainani, Head of Research at Augmont, said silver prices are being pushed higher due to supply-side constraints. She highlighted that mining disruptions and limited existing inventories have created severe supply shortfalls in the silver market. Chainani also noted that a weak US dollar is likely to continue boosting speculative demand for silver, especially during periods of geopolitical stress that increase safe-haven buying.

In the international market, investors rushed to the yellow metal following reports that the US attempted to seize additional tankers carrying Venezuelan oil. Spot gold rose 0.5 percent to $4,467.66 per ounce, after touching an intraday high of $4,469.52. US gold futures for February delivery climbed 0.74 percent to $4,502.30 per ounce.

Silver prices remained close to all-time highs, with spot silver trading at $69.15 per ounce. The metal had touched a record high of $69.44 on Monday. Gold has gained around 70 percent so far this year, crossing the $4,400 mark for the first time, driven by geopolitical tensions, robust central bank purchases, and expectations of lower US interest rates. Silver has outperformed gold, gaining nearly 140 percent year to date.

Analysts noted that non-yielding assets such as gold typically perform well in a low-interest-rate environment. Traders are currently pricing in at least two interest rate cuts by the US Federal Reserve next year. Federal Reserve Governor Christopher Waller recently indicated that there is still room for rate cuts, reinforcing bullish sentiment for precious metals.

Meanwhile, the US dollar remained near one-week lows against a basket of major currencies, making dollar-denominated bullion more attractive to overseas buyers. Other precious metals also gained, with spot platinum rising to a 17-and-a-half-year high and palladium touching its highest level in nearly three years.