Gold has always been an inseparable part of Indian culture, used in weddings, festivals, prayers, and savings. What is happening in 2026 has never happened before in India’s bullion markets, which have existed for many centuries.
Gold price records continue breaking since the beginning of 2026, shocking gold purchasers, jewellers, and investors, forcing them to reconsider their gold investments. In this blog, we will find out how the oldest gold market in India responds to rising gold prices.
The historic rally in gold prices
The gold prices continued their upward trend from late 2025 to early 2026, reaching new highs in January 2026. The global gold prices have increased by 18% to $5,100 per ounce at the start of the new year, and analysts believe that it can go even higher to $6,000 per ounce by the end of 2026.
This sharp increase in the gold prices at the start of 2026 was preceded by a strong 64% increase in the gold prices in 2025, when the gold price for the first time broke the $3,000 and the $4,000 levels, in the history of the global gold prices.
Domestically, the impact was similar. The 24-carat gold prices in the domestic gold market shot to a new high of more than Rs 1,80,000 per 10 grams in late January. These drastic changes in the gold prices were supported by investors’ strong buying interest in gold ETFs and ongoing geopolitical uncertainty.
The response of India’s Zaveri Bazaar and Bullion Hubs
Zaveri Bazaar is the centre of the bullion industry in India, which is situated in Mumbai. It is one of the largest gold markets in India, and the demand for gold in Mumbai is driven by diamond traders in Zaveri Bazaar, business families, NRIs, and the working-class population.
The increased gold prices have created a division among the gold buyers in Zaveri Bazaar. Retailers are more wary of making big gold purchases, whereas investors are buying gold at every downturn for value buying.
The gold prices in different cities slightly differ from each other based on the local demand-supply dynamics. For example, the gold price is relatively high in metropolitan cities like Chennai due to the high cultural demand for temple jewellery, and hence, the current gold rate in Chennaiis a bit higher than in other cities like Delhi and Mumbai.
In a Tamil family, it is tradition to purchase gold jewellery on auspicious occasions; hence, creating a consistent demand for gold in Chennai even at high prices.
The investment shift to digital gold
The increased gold rates have accelerated the ongoing trend of changing preference from gold coins and bullion to digital gold. At the beginning of the year, Indian gold ETFs had the best performance with net inflows reaching Rs. 240 billion, becoming the third in the world after the United States and China. For the first time, the inflow into gold ETFs surpassed that into equity funds.
Beginners prefer investing in Sovereign Gold Bonds, Gold ETFs, and UPI-based digital gold purchases that give the opportunity to invest in gold without paying additional commissions, storage, and assaying fees.
Conclusion
For the old gold markets of India, this surge in gold prices is both thrilling for investors seeking gold as an investment asset, while cooling off everyday gold jewellery demand. From the wholesale lanes of Zaveri Bazaar to the temple-town jewellers of Chennai, the response is the same, which involves adapting, innovating, and respecting the long-standing role of gold in an individual’s life.
It makes tracking of both global and domestic gold prices crucial for investors to make informed investment decisions in this precious metal.
Refresh Date: April 16, 2026
