National News
Gold price surges past Rs 1 Lakh/ 10 gm
In a landmark moment for the Indian bullion market, gold prices have surged past the Rs 1 lakh mark per 10 grams, reinforcing the precious metal’s status as a safe-haven investment during times of economic uncertainty. On Friday, Mumbai’s renowned Zaveri Bazaar witnessed an unprecedented rise in the price of 24-carat gold, which now stands at Rs 1,01,000 per 10 grams—marking the highest ever recorded in India’s history.
This significant increase is largely attributed to a confluence of international and domestic factors. Market experts suggest that rising global gold prices, coupled with expectations of potential interest rate cuts in the United States and Europe, have played a pivotal role in boosting demand. Additionally, a weakening US dollar and ongoing geopolitical tensions, particularly in the Middle East, have further cemented gold’s appeal among investors seeking stability in volatile times.
While this surge may be welcomed by investors, it poses a financial challenge for everyday consumers, especially during the current wedding season. As gold becomes increasingly expensive, middle-class buyers may find it harder to afford new jewellery. In fact, several gold traders have reported a noticeable dip in demand for newly crafted ornaments, with many customers choosing instead to liquidate existing gold assets to take advantage of the high prices.
Looking ahead, the trajectory of gold prices remains uncertain. If global instability continues and investor demand holds strong, experts believe that prices could climb even higher. On the other hand, some analysts foresee a potential cooling-off period, citing the likelihood of profit booking by investors who may now choose to capitalize on the recent surge.
In conclusion, the current rally in gold prices underscores the metal’s enduring significance in global and domestic markets. Whether this trend will persist or see a temporary pullback remains to be seen, but for now, gold continues to shine brightly as both an investment and a symbol of security.
National News
Rapid Growth In Gold Loan Merits Continued Vigilance: RBI FSR
The Report Cautioned That A Prolonged Correction In Gold Prices Could Weaken Collateral Protection
The rapid growth in lending against gold collateral amid elevated gold price volatility merits continued vigilance, even as asset impairment risks remain contained and LTV (loan-to-value) ratios provide comfortable cushion, according to the RBI’s Financial Stability Report (FSR).
Since March 2024, gold loans have grown at a staggering 42.4% annually (CAGR). To put that into perspective, other non-housing retail loans only grew at about half that speed (23%). Overall, the gold loan portfolio of lenders rose 54.5 per cent year-on-year (y-o-y) as of March-end 2026.
Both regular banks and NBFCs (Non-Banking Financial Companies) have been aggressively handing out these loans because gold prices have been so high. When gold is worth more, your gold jewelry can suddenly fetch you a much bigger loan.
FSR assessed that the recent increase in gold loans is driven primarily by existing borrowers, who are using higher gold prices to secure larger loans and roll over existing debt, as indicated by the gap between fresh originations and loan outstanding.
The report cautioned that a prolonged correction in gold prices could weaken collateral protection, increase borrower stress and result in higher delinquencies. Gold loans include agriculture gold loans that are offered against the collateral security of gold jewellery, ornaments and coins.
Right now, the situation is stable, and banks aren’t losing money yet. But the RBI is reminding lenders not to get blinded by the current gold rush. If gold prices take a tumble, a lot of these seemingly “safe” loans could turn into a major headache for the financial system.
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