Chennai Gold Market Proves Resilient Despite High Prices

Chennai's gold market is proving to be resilient in the face of high prices. The city's jewellery district, T. Nagar, saw brisk sales on Sunday, with the price of 24-karat gold standing at ₹15,890 per gram. This rate has been steady for months, and buyers are not waiting for a correction that has not materialized.

The sovereign, an eight-gram unit of 24-karat gold, is particularly popular in Tamil Nadu, Kerala, and Andhra Pradesh for wedding jewellery, dowry gifts, and savings instruments. At ₹1,27,120 per sovereign, it may seem expensive by historical standards, but buyers trust gold as a store of value.

The World Gold Council's research found that South Indian wedding demand is one of the most price-inelastic categories in global gold consumption. This means that even at high prices, families will not skip buying gold for weddings.

Goldman Sachs analysts are maintaining their year-end target of $4,900 per troy ounce, and central bank demand from the Reserve Bank of India adds an institutional floor to the price. The Federal Reserve's rate timeline is a key factor in determining whether the metal's ceiling will be higher or lower.