Gold Prices Soar by ₹20,000 in Three Weeks Amid Dollar Weakness

Gold prices in India have surged by ₹20,000 in just three weeks, ending a six-month period of stability. On August 24, 10 grams of gold were selling for ₹1.62 lakh.

The sudden rise is attributed to several factors. Firstly, the US dollar has weakened against major global currencies, making gold more expensive. The Dollar Index has fallen by 2.5% over the past month, leading to a surge in gold prices.

Secondly, expectations of lower returns on US bonds have led investors to withdraw their money and invest in gold. The US Treasury's announcement that it would buy back twice as many long-term government bonds from the market contributed to this shift.

Thirdly, central banks around the world are continuously buying gold to reduce their dependence on the dollar. According to the World Gold Council, central banks purchase an average of over 1,000 tonnes of pure gold every year.