1 week ago
Gold regains momentum as Treasury move fuels bullion rush
Gold became much more expensive in India and abroad.
In India, its price rose by almost 2% in one day.
The United States Department of the Treasury said it would buy more long-term government bonds.
This may add money to the bond market and make gold more attractive to investors.
Silver prices also rose sharply.
The increase comes before India’s festival and wedding buying season.
One industry leader said high prices could make people delay purchases or buy smaller jewellery pieces.
Another said people may still buy gold, exchange old jewellery, or choose lighter and lower-carat designs.
Domestic gold prices rose ₹3,212, or nearly 2%, to ₹1,57,080 per 10 grams on Thursday.
The United States Department of the Treasury will double longer-dated bond buybacks to $4 billion per operation from September 9.
Spot gold climbed 4% to $4,488 an ounce, while US gold futures settled 3% higher at $4,545.
Silver increased ₹8,541 per kilogram to ₹2,37,766 in the domestic market.
Industry leaders differed on festival demand, with one warning of weaker volumes and another expecting exchange-led and lighter-weight purchases.
- Who
- Gold investors, the United States Department of the Treasury, and India’s jewellery industry are involved.
- What
- Gold prices surged in India and international markets after a planned increase in long-term US Treasury bond buybacks.
- Where
- The move affected international markets and domestic markets in India.
- When
- The price surge was reported on August 20, 2026; the buyback increase is scheduled to begin September 9.
- Why
- The buyback plan was expected to support bond-market liquidity, lower long-term yields, and increase investor interest in gold.
Cautious demand outlook
Resilient festival demand outlook
Effect of higher prices
Cautious demand outlook
Prithviraj Kothari of the India Bullion and Jewellers Association said sharp price increases typically reduce physical demand because consumers may postpone purchases or choose lighter jewellery.
Resilient festival demand outlook
Rajesh Rokde of the All India Gem and Jewellery Domestic Council said higher prices do not necessarily weaken festival demand because gold has strong cultural and emotional importance in India.
Likely consumer response
Cautious demand outlook
Consumers may delay buying during the festive season as prices rise and volatility remains elevated.
Resilient festival demand outlook
Consumers may exchange old jewellery, buy lighter-weight or lower-carat ornaments, and continue purchasing rather than defer demand completely.
Retail sales impact
Cautious demand outlook
Jewellery sales volumes could come under pressure as higher prices make purchases more expensive.
Resilient festival demand outlook
Higher prices could support the total value of retail sales even if the number of items sold declines.
Key facts
- India gold price
- ₹1,57,080 per 10 grams, up ₹3,212 from the previous session
- Spot gold
- $4,488 an ounce, up 4%, after reaching $4,499
- US gold futures
- Settled 3% higher at $4,545 an ounce
- Silver price in India
- ₹2,37,766 per kilogram, up ₹8,541
- Treasury buybacks
- Longer-dated bond buybacks will rise from $2 billion to $4 billion per operation from September 9
- 30-year US Treasury yield
- Fell to around 5.19% from near two-decade highs
- MCX October gold
- Traded ₹264 higher at ₹1,58,260 per 10 grams
Quotes
Prithviraj Kothari
President of the India Bullion and Jewellers Association
“Gold holds deep cultural and emotional significance, especially during festivals and weddings. Higher prices enhance the value of existing holdings and often encourage consumers to exchange old jewellery for newer designs.”
thehindubusinessline.com
“Gold can test the $4,550-$4,600 range if pressure on the dollar persists.”
thehindubusinessline.com
Sources
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