Precious metals markets in Ahmedabad witnessed a historic surge on Saturday, with both gold and silver prices climbing to unprecedented peaks. This remarkable rally was fueled by mounting global uncertainties, prompting investors to flock towards traditional safe-haven assets.
Unprecedented Single-Day Surge in Silver
The most dramatic move was seen in silver, which shattered a crucial psychological barrier. The white metal leaped by a staggering Rs 19,000 in a single trading session, crossing the Rs 2.52 lakh per kg mark. This jump from Friday's closing level of Rs 2.33 lakh per kg was described by market participants as one of the steepest single-day gains observed in recent months.
Interestingly, the soaring prices triggered a surge in demand for silver bullion, with many buying heavily for investment. However, the extreme volatility led to a paradoxical situation in the market. Several jewellers and bullion traders have temporarily halted sales due to limited supply and uncertainty over future price directions.
Gold Continues Its Upward March
Gold was not far behind, continuing its relentless upward trajectory. The yellow metal touched a record high of Rs 1.45 lakh per 10 grams on Saturday, marking an increase of Rs 2,500 from the previous day's price of Rs 1.425 lakh.
However, the nature of gold purchases has shifted. With prices moving out of reach for many, transactions are now largely occasion-driven. A city-based jeweller revealed that about 80% of sales involve exchanging old gold for new jewellery. Furthermore, a majority of wedding jewellery purchases are now focused on 14 and 18-carat gold instead of the purer 22-carat variants, as customers seek to manage costs.
Market Uncertainty Leads to Trading Halt
Manoj Soni, a jeweller based in Ahmedabad, highlighted the sudden shift in market sentiment. "Till a week ago, the demand was barely there. However, ever since the silver price crossed the Rs 2.20 lakh per kg mark, the bullion demand suddenly shot up," he said. He confirmed that many jewellers have voluntarily decided to pause trading in silver bullion for two days due to price uncertainty, especially with year-end holidays affecting international markets.
Industry sources confirmed that the B2B (business-to-business) trade of silver has been on a temporary halt since Christmas. This pause is attributed to the heightened volatility in silver prices, year-end holidays abroad, and the resultant ambiguity over trading prices.
Haresh Acharya, director at the India Bullion and Jewellers Association (IBJA), provided expert insight into the rally. He attributed the sustained rise to elevated geopolitical risks, global growth concerns, and expectations of monetary easing by central banks. "Gold continues to serve as the anchor hedge amid elevated global uncertainty, while silver is emerging as the high-beta outperformer of the current cycle," Acharya stated.
He pointed out significant stress on liquidity, particularly in the silver market. "B2B transactions have temporarily slowed as participants struggle with price discovery amid sharp intraday movements. Market liquidity is thin, and silver is being quoted at a premium of 5-7%, which clearly reflects a lack of confidence in the US dollar and heightened caution among institutional buyers," Acharya explained. He added that most players are staying on the sidelines until prices stabilize.
Acharya also noted the distinct drivers for each metal. While gold benefits from safe-haven demand and aggressive central-bank buying, silver attracts additional interest due to its dual role as both a precious and an industrial metal. "That combination is amplifying price moves in silver, especially during bullish phases," he concluded. The coming weeks are likely to see both metals being driven by currency stability and global risk flows.
