Gold Surges 63% to Rs 1.55 Lakh: ETFs Now Lead Over Jewelry

Gold's Surge: The Key Drivers

Gold prices have jumped 63% from Rs 95,500 per 10 grams of 24-karat gold on April 15 last year to about Rs 1,55,570 as of April 15, 2026. This surge comes just before India’s auspicious Akshaya Tritiya festival, a time traditionally marked by strong gold purchases. Current market conditions show Brent crude oil trading around $94.25 a barrel and the USD/INR exchange rate at 93.20, reflecting ongoing volatility influenced by geopolitical tensions and changing economic signs. The precious metal's rise is supported by steady buying from central banks globally and robust retail investor interest, reinforcing its role as a safe asset despite high prices. Last week, gold saw a 2% increase, while silver prices edged down slightly on April 15, 2026, trading around Rs 2,52,680 per kilogram, a marginal 0.15% decline.

Investor Shift: Gold ETFs Capture Demand

This year's Akshaya Tritiya demand shows a clear shift from traditional physical jewelry towards digital gold formats and Exchange Traded Funds (ETFs). Indian gold ETFs saw substantial inflows of Rs 24,040 crore in January 2026, more than doubling from the previous year, showing investors are looking to diversify and protect their wealth. This contrasts with global trends, where March 2026 saw record outflows of $12 billion from gold ETFs, mainly from North America, driven by changing interest rate expectations and a 'risk-off' sentiment. However, steady inflows from Asian investors, including India and China, have partly offset these Western divestments, highlighting regional differences in investment strategies. Central banks continue to be major buyers, adding about 860 tonnes in 2025, with projections for 2026 remaining strong at around 800 tonnes. This sustained institutional demand means gold now makes up a larger share of global official reserves, exceeding US Treasury holdings in value. Historically, major silver price increases often follow periods when the gold-to-silver ratio is high. However, in 2025, silver outpaced gold’s gains year-to-date, indicating renewed momentum for the white metal. Meanwhile, Indian equity markets, tracked by the BSE Sensex at 78122 points on April 15, 2026, have seen moderate gains year-to-date but underperformed global indices, highlighting gold's appeal as a stable hedge.

Potential Risks: What Could Cool Prices

Despite its cultural importance, the current price surge presents risks. Sustained high prices could lead to reduced demand, especially from buyers sensitive to price who traditionally buy physical jewelry. While investors are opting for lighter jewelry and coins, the 63% year-over-year price jump itself could discourage buying. The Indian Rupee's sharp drop of 9.13% over the past 12 months, reaching an all-time high of 99.82 in March 2026, raises the cost of imported gold, pushing domestic prices higher. Geopolitical tensions typically support gold, but clear signs of de-escalation, such as reported peace talks between the US and Iran, could trigger price corrections by lowering the perceived risk. Furthermore, the significant outflow from North American gold ETFs in March suggests institutional investors are rebalancing portfolios. They might see gold as fully priced or look for opportunities elsewhere as expectations for Western rate hikes change.

Outlook: Continued Strength Expected

Analysts expect gold prices to remain strong, with forecasts suggesting prices could reach around Rs 2 lakh for the next Akshaya Tritiya, supported by ongoing central bank buying and steady ETF demand. The move towards digital gold assets is expected to continue, as investors want to avoid the high making charges and storage issues linked to physical gold. Gold's dual role as a cultural symbol and a hedge against geopolitical and currency risks puts it in a good position for continued investor interest.