Gold Price Crosses ₹1,50,000: Key Reasons Behind the Sharp Rise

Gold prices in India have crossed the ₹1,50,000 mark per 10 grams as of 21 Jan 2026, creating headlines and raising questions among investors and buyers. This sharp move is not happening in isolation. It reflects rising global risks, shifting investor behaviour, and factors that make gold more expensive specifically for Indian markets. Understanding the reasons behind this rise helps explain why gold continues to shine when uncertainty increases.

Global uncertainty is pushing investors towards gold

The biggest driver behind the recent surge in gold prices is growing global uncertainty. Financial markets across the world have become nervous due to rising geopolitical tensions and the risk of fresh trade conflicts. When investors feel unsure about economic growth, trade stability, or political decisions, they usually move money away from risky assets like stocks and into safer options such as gold. This shift in behaviour increases demand for gold and pushes prices higher.

The Greenland saga and fear of a new trade war

A key trigger behind the current wave of uncertainty is the so-called Greenland saga. The United States has renewed pressure around gaining strategic control over Greenland, an autonomous territory of Denmark. What has shaken markets is not just the political statement, but the threat of steep tariffs on several European countries if negotiations do not move in the desired direction. These tariffs are expected to start at lower levels and rise sharply over the next few months, impacting major economies in Europe.

Markets fear that this could turn into a wider trade conflict between the United States and Europe. Trade wars increase costs for businesses, disrupt supply chains, and slow down global growth. Even the possibility of such an outcome is enough to make investors cautious. As stock markets reacted with sharp falls and higher volatility, money started flowing into gold as a safer store of value.

How uncertainty translates into higher gold prices

Whenever global risks rise, investors reduce exposure to assets that depend on growth and stable trade, such as equities. Gold benefits from this situation because it does not depend on company profits or economic expansion. It is seen as a hedge against instability. As more investors across the world buy gold to protect their wealth, global prices rise. This safe-haven demand is one of the strongest reasons gold performs well during periods of political and economic stress.

Why the impact feels stronger in India

For Indian buyers, the rise in gold prices feels sharper because gold is imported and priced in US dollars. When the rupee weakens against the dollar, the cost of importing gold increases even if global prices remain unchanged. In the current environment, currency pressure has added to the price rise. This means Indian gold prices often rise faster during global rallies compared to some other markets.

Central bank buying and long-term support

Another important factor supporting gold prices is steady buying by central banks around the world. Many central banks have been increasing their gold reserves to reduce dependence on major currencies and to strengthen financial stability. This creates long-term demand for gold and supports prices even when short-term market sentiment changes. Along with this, investment flows into gold-backed funds also rise during uncertain times, adding further support to prices.

What this means for investors and buyers

• Gold crossing ₹1,50,000 confirms that markets are pricing in higher global risk rather than short-term speculation. This reinforces gold’s role as a hedge against uncertainty, not just a commodity driven by demand and supply.
• Investors who already hold gold benefit from portfolio protection, as gold typically performs well when equities and risk assets face pressure. This helps reduce overall portfolio volatility during uncertain periods.
• For new buyers, chasing gold purely because prices are at record highs can increase timing risk. Gold delivers better value when accumulated gradually rather than bought in reaction to headlines or sudden price spikes.
• Gold works best when used as a long-term allocation within a diversified portfolio, not as a short-term trading instrument. Overexposure at peak levels can limit future returns if prices stabilise or correct.
• Future gold price movement will depend on how global trade tensions evolve, whether geopolitical risks ease, and how currencies like the rupee perform against the US dollar. Any clarity on these fronts could slow the pace of further gains.

Disclaimer

Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities are quoted as an example and not as a recommendation.This is nowhere to be considered as an advice, recommendation or solicitation of offer to buy or sell or subscribe for securities. INDStocks SIP / Mini Save is a SIP feature that enables Customer(s) to save a fixed amount on a daily basis to invest in Indian Stock. INDstocks Private Limited (formerly known as INDmoney Private Limited) 616, Level 6, Suncity Success Tower, Sector 65, Gurugram, 122005, SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428. Refer https://indstocks.com/pricing?type=indian-stocks; https://www.indstocks.com/page/indian-stocks-sip-terms-and-condition for further details.