Topic 5: BULLION: SPARKLING GLOW

The bullion market in August 2025, particularly gold and silver, experienced a phase of moderate volatility but maintained an overall stable to slightly bullish undertone, driven by global macroeconomic uncertainties, domestic demand factors, and currency movements. Gold in India largely hovered around the psychological ₹1,00,000 per 10 grams mark, reflecting resilience despite sharp intra-month swings. For instance, gold touched ₹1,01,060 on August 11, slipped to ₹1,00,520 on August 23, and then regained ground toward the end of the month. On the global front, international gold prices consolidated near $3,370 per ounce, sustaining elevated levels after a year of strong gains. A key driver behind gold’s resilience was safe-haven demand, as geopolitical tensions, including escalating U.S. tariff measures and ongoing conflicts. The rupee’s persistent weakness against the U.S. dollar, hovering near record lows around ₹88 per dollar, further underpinned domestic bullion prices by raising import costs and enhancing gold’s appeal as a hedge. Seasonal buying patterns in India also played a role, with demand beginning to strengthen ahead of festivals and weddings. The silver market displayed modest upward momentum, supported by its dual role as both an industrial metal and a safe-haven asset. Domestic silver prices climbed into the ₹1,14,000–₹1,18,000 per kg range in late August, showing relative strength compared to gold. Globally, silver advanced by about 2.2% in the last week of August, a move aided by industrial consumption trends, particularly in electronics and renewable energy, and investor allocations into precious metals amid volatility. The narrowing gold-silver ratio also signalled silver’s outperformance during the month, highlighting investor preference for the metal’s industrial-linked growth story. The sharpest bullion movements occurred between August 11 and August 14, when Indian 24K gold saw one of its steepest corrections of the year, dropping nearly ₹930 per 10 grams in just three days. This fall was largely triggered by the reversal of tariff rumours. Initially, speculation that the U.S. might impose tariffs on Swiss gold bars had driven futures higher, but President Trump’s official dismissal of those rumours on August 12 sparked a global selloff. This correction was amplified by profit booking, as gold had already surged over 28% since January 2025, recently breaching the ₹1 lakh mark in India. At the same time, the RBI’s intervention in the currency markets strengthened the rupee temporarily, lowering import costs and adding further pressure on local gold prices. Toward the end of August, however, the trend reversed again, with gold regaining strength. On August 29, international gold futures briefly touched near-record highs of $3,477 per ounce, fuelled by speculation that the U.S. Federal Reserve could consider rate cuts to cushion global growth, reigniting safe-haven demand. This late-month rally provided a bullish tone to an otherwise range-bound month. In summary, the bullion market in August 2025 was defined by stability with pockets of sharp volatility. Gold consolidated near ₹1,00,000 per 10 grams in India and $3,370 per ounce globally, supported by safe-haven demand, rupee depreciation, and seasonal domestic consumption. Silver outperformed with steady gains, benefiting from both industrial demand and safe-haven appeal. The most notable gold price move came mid-month, triggered by a reversal of tariff rumours and profit booking, while late August saw renewed bullishness on expectations of U.S. monetary easing. Overall, bullion markets in August reflected a careful balance of geopolitical risk, domestic currency pressures, investor sentiment, and seasonal consumption trends, with gold providing stability and silver showing relative strength.