Why Gold Is Soaring
As per Retail Jeweller‘s his steady climb is not isolated to Tamil Nadu. It’s part of a global gold rally triggered by a confluence of economic factors:
Global safe-haven demand: Amid persistent fears of a global economic slowdown, rising geopolitical tensions, and volatile stock markets, investors across the world are turning to gold, a traditional safe-haven asset. In April 2025, global gold prices crossed $3,500 per ounce, and analysts expect it to inch toward $4,000 in the coming months.
Rupee depreciation: The Indian rupee has weakened significantly against the US dollar in recent months, making gold imports more expensive. Since India imports most of its gold, this currency movement directly translates to higher prices domestically.
Domestic festive and wedding demand: In Tamil Nadu, seasonal buying around Akshaya Tritiya and an extended wedding season have added fuel to the price momentum. Though volumes have slowed compared to previous years, the cultural centrality of gold means demand has not dried up.
Local Reactions: Tradition Meets Caution
In Chennai’s T. Nagar, one of the largest gold retail hubs in South India, footfall has remained steady but cautious.
“Customers are asking more questions. They’re comparing rates across showrooms, using apps to monitor daily price movements, and many are buying gold coins instead of jewellery,” says Gopalakrishnan, manager at a local jewellery store. “People still want to buy gold, but they’re being strategic.”
Interestingly, several jewellers in Tamil Nadu report a shift from ornamental gold toward bullion investments and digital gold, especially among younger buyers and middle-income investors. Sovereign Gold Bonds (SGBs) and Gold ETFs have seen increased traction, signaling an evolution in consumer behavior.
What Experts Are Saying:
Financial analysts agree that the momentum is likely to continue, though short-term corrections may occur.
Goldman Sachs has forecasted that global gold could reach $3,880/oz by the end of 2025, driven by anticipated interest rate cuts by the US Federal Reserve and heightened recession fears.
Citi recently raised its 3-month gold price target to $3,500/oz, citing the metal’s resilience despite record highs.
Domestic brokerage firms like HDFC Securities and Motilal Oswal expect Indian gold prices to consolidate in the Rs. 9,800–10,200 range in the near term, with potential to breach Rs. 11,000 per gram by early 2026 if global trends hold and the rupee remains weak.
Short-Term Traders vs. Long-Term Investors
According to experts, Tamil Nadu’s retail investors are now broadly divided into two camps:
Short-term traders: Booking profits at peaks, buying on dips (around Rs. 9,800/gm), and using stop-loss tools for intraday volatility.
Long-term investors: Opting for systematic gold investment plans (G-SIPs), diversifying portfolios with SGBs and Gold ETFs.
Experts advise that investors keep 10–15% of their portfolio in gold to hedge against inflation and currency depreciation, especially in uncertain economic climates.
Unique to Tamil Nadu: Emotion, Ritual, and Now, Algorithms.
In Tamil Nadu, gold isn’t just a commodity; it’s emotional capital. It marks weddings, births, and festivals. But what’s unique about the current surge is how emotional buying is merging with digital strategy.
Many retail consumers are now using apps that send real-time alerts when gold drops even by Rs. 10. Local WhatsApp groups and Telegram channels run by jewellers are offering flash deals and technical charts. In Coimbatore, a leading retailer has even launched a “Buy-the-Dip” loyalty program that gives cashback for staggered purchases made during market corrections.
“This blend of tradition and tech-savvy behavior is unique to Tamil Nadu,” says Meena Somanathan, an independent financial advisor based in Madurai. “It’s not just a gold rush. It’s a gold evolution.”
Looking Ahead: What’s in Store?
In the coming months, gold prices are expected to remain volatile but elevated:
Next 1–2 months: Analysts expect a consolidation phase in the Rs. 9,800–10,200/gm range.
Medium term (3–6 months): If global prices move to $3,700/oz, domestic prices could cross Rs. 10,500/gm.
By early 2026: With persistent inflation fears and election-year spending in the U.S., gold could hit Rs. 11,000/gm or higher in Tamil Nadu.
Conclusion
The surge in gold prices over the past three months in Tamil Nadu is both a reflection of global financial anxieties and the region’s deep-rooted relationship with the metal. As investors and families alike recalibrate their buying behavior, a new pattern is emerging, one that honors tradition but thinks with data.
In Tamil Nadu today, gold is no longer just a purchase, it’s a portfolio decision.
