Gold prices in Chennai have skyrocketed beyond ₹1 lakh per sovereign, hitting a record high as 22K gold reached ₹1,02,000 for 8 grams today up from recent levels around ₹92,000 in October.
This sharp hike, driven by global factors and festive demand, is squeezing consumers just as Tamil month Thai approaches, a peak wedding period when families traditionally buy large quantities for bridal jewellery.
Reasons Behind the Price Spike
The surge stems from multiple pressures: global economic uncertainty and geopolitical tensions boosting gold as a safe-haven asset, persistent inflation eroding currency value, and a weakening rupee raising import costs for India, Chennai’s major gold trading hub.
Internationally, gold demand from central banks and investors amid US economic signals has propelled spot prices upward, with local taxes and octroi in Tamil Nadu adding to the Chennai premium. Seasonal factors like Diwali aftermath and pre-Thai wedding rushes have amplified physical demand in South India, where gold holds deep cultural significance for marriages and investments.
Wedding Season Woes
With Thai (mid-January to mid-February) ushering in auspicious wedding dates, Chennai families face a costly affair as sovereigns—essential for thali and bridal sets—now exceed ₹1 lakh, up over 10% from early December. “We’re buying 20-30 sovereigns per wedding, but this hike means an extra ₹2-3 lakh burden per family. Brides are opting for lighter designs, yet the math doesn’t add up,” said R. Priya, a T. Nagar resident planning her daughter’s Thai wedding.
Jewellers report 15-20% drop in volume sales despite higher values, pushing buyers toward antique or jadau pieces to cut making charges.
Jewellers’ Association Weighs
An office-bearer of the Jewellers and Diamond Traders Association of Madras (MJDTA), noted, “Global cues like US inflation and rupee depreciation are the culprits, not local supply issues—similar to the sharp Muhurat drops earlier this year. We’re seeing steady Thai pre-orders, but consumers must plan ahead as prices may hold firm.”
He added, “Chennai’s gold trade thrives on weddings, but this surge tests affordability. Associations urge government intervention on import duties to ease the load during peak Thai season.”
Middle-class families in Chennai are hit hardest, postponing purchases or negotiating discounts amid 24K gold at ₹13,908 per gram.