Diwali buying drives gold prices to record highs, equities rally on global cues

Update: 2025-10-16 19:54 GMT

Mumbai: Gold prices have surged to unprecedented levels ahead of the Diwali festival and the wedding season, while domestic equities also posted strong gains, with the BSE Sensex rising 862.23 points to 83,467.66 and the NSE Nifty closing at 25,585.30 on Thursday. Despite the sharp rise in gold, consumer demand remains robust, largely driven by purchases of bullion rather than traditional jewellery, traders said.

In the national capital, gold prices retreated slightly by Rs 200 on Thursday to Rs 1,31,600 per 10 grams, following profit booking by traders, according to the All India Sarafa Association. Yet, this minor dip has not slowed investor interest.

“Gold prices are increasing every day, and people are looking at this as an investment. Jewellery demand has slowed, but gold bars and coins are in high demand. Ahead of the wedding season and festivals, we are seeing strong sales of gold and silver bars,” said Vrishank Jain, owner of Umedlal Tilokchand Zaveri Jewellers in Mumbai’s Zaveri Bazaar.

Many buyers are securing current rates through advance bookings or purchasing coins, anticipating further price gains. “People expect a further surge in gold and silver prices in the coming days,” Jain added.

Consumers often regard gold as both a long-term investment and a culturally significant purchase, particularly during festivals such as Dhanteras. Devras Bhai Parmar, a regular buyer at Zaveri Bazaar, said, “Buying gold during Diwali is considered auspicious and also an investment. In emergencies, we can convert gold into cash. It has been a family tradition to buy gold every Diwali.”

Kumar Jain, spokesperson for the Indian Bullion Jewellers Association, noted that weddings continue to drive demand. “People are recycling old gold, and demand remains steady. Factors like the US trade war, rising stamp duties, and geopolitical tensions in Ukraine and the Middle East have all contributed to the price surge,” he said.

Sharmila, another customer, echoed this sentiment. “Despite the price rise, I will buy gold, perhaps in smaller quantities. I want to teach my children the tradition and value of investing in gold. Unlike a car, gold retains and grows its value over time.”

Analysts said the Sensex and Nifty gains were supported by positive global cues, hopes of a US Federal Reserve rate cut, optimism over India–US trade discussions, early signs of foreign institutional inflows, and expectations of a Q3 FY26 demand revival.

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