The BRICS TimesSoaring gold prices, which hit a staggering 1.42 lakh per 10 grams from 80,000 at the start of 2025, are pushing the metal out of the common person’s reach. Despite this, the purchase of gold jewelry remains steady as consumers adopt a clever, lower-karat solution.
The Gold Price Surge and a Smart Solution
India’s gold market has seen a record surge in prices this year. On Friday, December 26, the price of 100 grams of 24-carat gold increased by ₹58,000. The cost for 10 grams went up by ₹5,800. Gold prices reached a record-high level nationwide the day after Christmas.
During this period, gold was cheapest in Hyderabad, selling at ₹1,40,020 per 10 grams. In contrast, it was most expensive in Chennai, priced at ₹1,40,620 per 10 grams. This upward trend is moving gold beyond the grasp of the middle class. However, a report reveals that people have not reduced their gold buying despite this price jump. The purchase of gold in the bullion market is still ongoing. Consumers have found a smart and effective way to continue buying.
A Clever Alternative Emerges
The public is now prioritizing 14 and 18-carat gold over the traditional 22-carat pure gold. Previously, these lower-carat options were mainly used for diamond jewelry. This shift is now ushering in a new and distinct trend in the jewelry market. 14 and 18-carat gold was utilized in diamond-studded pieces for its superior strength and durability. This allowed diamonds to remain firmly set in rings and other jewelry without easy breakage or bending. Given the current rising prices, people are now regularly buying and selling these lower-carat options.
Demand for Pure Gold Declines
According to a Moneycontrol report, the Ahmedabad Jewellers Association stated the price of gold was ₹80,000 per 10 grams in early 2025. It has now climbed dramatically to ₹1.42 lakh. Two years ago, 22-carat gold constituted 75 percent of the gold used in wedding jewelry. This share has now dropped significantly to just 50 percent.
Market experts suggest that the demand for 14-18 carat options will persist amidst the continually rising gold prices. Not everyone can afford 22-carat gold jewelry with the heightened costs. Therefore, 14 to 18-carat gold is emerging as a practical alternative. Wedding celebrations, they state, feel incomplete without some gold jewelry.
No Expected Spike Next Year
Meanwhile, Nilesh Shah, Managing Director of Kotak Mahindra AMC, offered his perspective. He mentioned that the recent rally observed in gold and silver will likely not continue into 2026. Nevertheless, he noted that the overall outlook remains positive. Speaking with ET NOW, Shah advised investors to follow the ‘dharma’ of asset allocation for better returns. He stated, “The kind of rally we have seen in precious metals, it is unlikely to be repeated in 2026. However, central bank buying and industrial demand for silver, particularly from electric vehicles, keeps the outlook positive for both gold and silver.”
