Gold Price: The increase in prices increases the value of assets of those families who already have gold and silver, which has a positive impact on household wealth.

The government explained in Parliament why there was such a huge jump in the prices of gold and silver.

Gold & Silver Price: The government has clarified that the main reason behind the sharp rise in the prices of gold and silver in recent months is the increasing geopolitical tension and economic uncertainty at the global level, due to which investors are increasingly turning towards safe investment options. Minister of State for Finance Pankaj Chaudhary, in a written reply in the Lok Sabha, said that the prices of gold and silver in India basically depend on the prices determined in the international market, the exchange rate of the rupee against the US dollar and the taxes and duties applicable in the country.

Rise in gold prices

He said that when war-like situations, fears of a global recession, or economic instability increase, investors shift from risky instruments like the stock market to safer assets like gold and silver, leading to a surge in their prices. Furthermore, central banks and major financial institutions around the world are also purchasing large quantities of gold, further strengthening demand.

The Minister also stated that although gold and silver prices have increased in the current year, the impact is not uniform across all states and all sections of society, as these metals hold varying social, cultural, and economic significance in different regions and communities. He added that gold and silver are not only consumer goods but also important investment instruments and are considered safe assets in uncertain times.

The government gave the reason

Rising prices increase the wealth value of households that already own gold and silver, positively impacting household wealth. He also clarified that precious metal prices are entirely market-driven, and the government plays no direct role in pricing.

Citing figures, the minister said that in the current financial year till September, India has imported gold worth about $26.51 billion and silver worth $3.21 billion, which reflects strong domestic demand for these metals.