Daybreak - Gold’s record run is really a dollar story with a rupee twist

Episode Date: September 17, 2025

Gold has hit record highs: $3,702.95 an ounce globally and ₹110,666 per 10 grams in India, up over 40% this year. But inflation seems to be easing, and there’s no immediate threat of war. What could be behind the surge? Experts point to central banks around the world buying gold, expectations of U.S. rate cuts weakening the dollar, and Indian households holding onto their gold, limiting supply. The rally matters for India because it pushes up imports and puts pressure on the rupee, which hit a record low of 88 against a dollar this year. What does gold’s rise tell us about global money and India’s economy.Tune in.P.S. Are you a manager, recruiter or founder who has been part of a hiring process in the last year? Rahel from 90,000 Hours  wants to hear from you. Take our survey.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

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The price of gold is making history. This past week, gold hit a record of $3,702.95 for an ounce globally. In India, it soared past 1,10,666266 for 10 grams, which is the highest level ever recorded. To give you more perspective, in just nine months of this year, which is 2025, prices in India are up by more than 40%. Last year alone, they had already climbed 21%. But here's the puzzle. Inflation has mostly eased from its peaks, and there is no new financial meltdown or a fresh global war in the picture. And yet, gold, the so-called safe haven, is more expensive than ever before.

So what's driving this? News reports point to three main forces. First, central banks around the world have been buying gold slowly but steadily. Second, investors are expecting the US Federal Reserve to cut interest rates which weakens the dollar and makes gold more attractive. And third, in India, households are holding on to their gold rather than selling it, which is tightening local supply even more. So today's story is not just about shiny metal bars and walls or jewelry that we wear in festivals and weddings. It is about how money flows across the world and how that flow affects our country directly. Gold's global rally means that jewelry prices climb ahead of the festival season. It means India's import bills will swell and it means more pressure on the

repeat that has already had a choppy year, swinging between record lows past 88 to the dollar in the summer and brief recoveries when foreign investors returned. So the question is, does this record run in gold signal something bigger? Is there a quite shift in global trust away from the dollar? Or is it just another turn in the cycle of rates and markets? Welcome to Daybreak, a business podcast from the Ken. I'm your host Nick Dharma and I don't chase the new cycle. Instead, every day of the week, my colleague Rachel Vargis and I will come to you with one business story that is worth understanding and worth your time. Today is Thursday, the 18th of September.

This is gold's record run. It helps to look at who's buying and why. First is the demand from central banks around the world. The World Gold Council's data shows that central banks added around 10 tons in July alone. Individually, that number may not sound very large, but But as a part of a consistent trend, it matters. Normally, countries use gold to diversify their reserves. Instead of keeping everything in dollars or euros, they try to spread the risk. Second is the expectation of American rate cuts. Here is how it works.

When interest rates in America are high, investors earn good returns from US government bonds. In that scenario, gold, which pays no interest, looks less appealing. But when the Fed signals cuts, those bond yields fall. Suddenly, holding gold doesn't mean losing out as much. That shift in opportunity cost makes gold more attractive. The dollar link comes next. If US rates fall, global investors are less drawn to the dollar. The dollar weakens and since gold is priced in dollars, it becomes cheaper for buyers

using other currencies. That encourages more buying, lifting the prices of gold. further. India's supply stories adds another layer. Normally, soaring prices tempt households to sell old jewelry or what is called scrap supply. But Reuters reports that this time families seem to be holding on. They are betting that prices will rise even more. Scrap supply has stayed muted. Imports, meanwhile, are surging. In August, India imported more than $5 billion worth of gold, up by 37% from July. This combination is pushing domestic prices even higher.

So, together, these forces, that is, global policy shifts, central bank moves and domestic behavior, explain why gold has broken records this year. But why should ordinary Indians care about gold's international rally? Stay tuned to find out. Hi, I'm Rahil Filippos, the host and producer of 90,000 hours, the Ken's podcast on the future of careers and workplaces. I'm briefly interrupting this episode to tell you about what I'm working on next.

It's an episode in which I'm asking a pretty big question. Is AI fixing hiring or is it breaking it? Because here's what's happening. Companies are leaning on AI to scan resumes and run assessments. At the same time, applicants are using AI to get past those very same filters. The result? Frustration on both sides. Now, that is where you come in.

If you have hired or tried to hire in the past year, I want to know what's really changed for you. How are you thinking about hiring differently? There's a quick link in the show notes. Take the survey and your experience could help me shape my episode. Thank you. With that, let's get back to the episode. Now, here is why this matters for us, Indians.

Because ultimately, it will filter down into the economy. Let me tell you how in three clear ways. One is jewelry costs. Gold at 1,10,6666 means that weddings and festivals come with a bigger price tag. Jewelers are already facing supply shortages, which limits discounts. Like I told you earlier, Reuters noted that households are not selling old gold, which keeps fresh supply tight, and that makes each gram more expensive for buyers. Next comes the trade bill.

India is one of the world's biggest consumer. rumors of gold. The first is China. With imports over $5 billion in August alone, our trade deficit can widen. When we import more and export less, the current account balance weakens and that matters because it shapes how much foreign money India needs to finance its gap. Next comes the rupee. Here is where the chain reaction comes full circle. Higher gold imports means more dollars leaving the country. And that puts pressure on the rupee, which is already sensitive to global flows. The rupee has already had a bumpy ride this year. It hit record lows beyond 88 against the dollar not long ago. And of course, at times it did recover slightly

when foreign investors brought money back into the Indian markets, but overall it has remained under pressure, trading near historic lows for much of this year. Now, these swings do not stay on trading screens alone. They do show up in everyday life as well. Think about petrol and diesel. India imports more than 80% of its crude oil. When the rupee weakens, oil becomes more expensive in rupee terms, even if global crude prices are steady. That translates into higher fuel bills, which ripples across the economy from vegetables transported by trucks to flights book for family holidays. It is the same story with electronics. More smartphones, laptops and household appliances depend on imported components. A weaker rupee means importers pay more dollars for the same

goods. Some of that cost gets passed on to customers. So, a currency dip can make that new phone upgrade or even a basic fridge replacement noticeably pricier. Education and travel are also other clear pinch points. Families sending children abroad to university have to budget more when the rupee slips. Holidaygoers also feel the same squeeze when booking trips abroad where every meal or museum tickets suddenly costs more in rupee terms. Now, layer on higher gold imports. the Fed cuts rates, the US dollar weakens, which can give the rupee a breather. But that relief may not last very long, because rising import bills from gold, oil and electronics can drag the rupee back down. And that is why analysts watch gold not just as a shiny metal, but as a signal

of pressure points in India's balance of payments. So now, coming back to the question that we asked earlier in the episode. Does this mean that the dollar's dominance is slipping? Well, the answer is not overnight. Deutsche Bank's forecast of $4,000 announced by 2026 reflects optimism about gold's demand. But news reports also said that after the record high, prices dipped slightly as traders booked profits and waited for the Fed's decision. That shows that the rally is still tied to immediate interest rate moves and not a permanent loss of faith in the dollar yet.

For India though, the bigger takeaway is simpler. When gold rises, it's not just about jewelry. It is about how global money shifts affect the rupee, the trade balance, and even our household budgets. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample

of a subscriber-only offerings and a full subscription of daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague Snitha Sharma and edited by Rajiv CN.