Srinagar, Dec 28: In the narrow lanes of Sarafa Bazar, where the rhythmic hammering of goldsmiths has echoed for centuries, an unsettling silence now hangs over workshops that once bustled with bridal orders. Gold prices in Kashmir have skyrocketed from Rs 4,400 per 10 grams in 2000 to a staggering Rs 1,30,000 in 2025—a mind-numbing 3,000 percent increase that has transformed the Valley’s treasured yellow metal from an accessible asset into an aspirational luxury.
For Kashmiri families who have traditionally purchased gold for weddings and as a hedge against uncertainty, the relentless price climb has fundamentally altered buying patterns.
While the allure of gold remains undiminished, the affordability crisis has pushed purchases beyond the reach of ordinary households.
“This price spiral has broken the backbone of goldsmiths,” said Bashir Ahmad Rather, President of the All Kashmir Gold Dealers Union. “The craft that sustained generations of Kashmiri artisans is now under existential threat.”
The price trajectory reflects distinct phases.
The early 2000s saw relative stability with prices between Rs 4,300 and Rs 7,000. The 2008 global financial crisis pushed rates to Rs 12,500, marking the first wave of customer resistance. The 2011-2012 bull run brought gold to Rs 31,050—a psychological shock when the metal crossed Rs 25,000. Wedding purchases began shifting from heavy jewellery sets to lighter designs.
A brief respite came during 2013-2015 when import duty hikes stabilised prices around Rs 26,000-29,000. However, the climb resumed, reaching Rs 35,220 by 2019. The COVID-19 pandemic drove unprecedented volatility, with prices surging to Rs 48,651 in 2020. In Kashmir, the dual lockdown—first from the political changes of August 2019, then from the pandemic—created chaos in the gold trade.
The final surge has been most devastating. From Rs 52,670 in 2022, prices leapt to Rs 77,913 in 2024, before exploding to the current Rs 1,36,570—a 75 percent jump in just one year driven by record global prices above $4,500 per ounce, severe rupee depreciation, and persistent import duties.
“People throng our shops to check rates or to sell old ornaments, but very few are making fresh purchases. It is difficult to survive on exchanges and minor repairs when stock investments are so high,” said Ghulam Nabi, a jeweller in Srinagar’s historic Zaina Kadal market.
With gold at Rs 1.36 lakh per 10 grams, even a modest 50-gram bridal set now costs Rs 6.8 lakh in raw material alone. For a region where per capita income lags national averages, such prices have priced out the traditional customer base.
“We’ve shifted almost entirely to lightweight designs—hollow bangles, thin chains, minimal necklaces,” explained another jeweller in Maharaj Gunj. “The heavy 22-karat sets our mothers wore are now museum pieces. Even for weddings, families are buying 10-15 grams where they once purchased 50-100 grams.”
An ironic twist has emerged: while new gold sales have collapsed, trade in old gold has surged. Families facing financial pressures are liquidating jewellery purchased during earlier years, realising substantial gains. “We see more sellers than buyers now,” Rather confirmed.
Gold occupies a unique place in Kashmiri culture beyond its monetary value—representing family honour, social status, and intergenerational wealth transfer. The affordability crisis threatens these traditions. “There’s immense social pressure to maintain traditions, but the economics have become impossible for most families,” explained a social observer.
The investment paradox is striking: families who purchased 100 grams in 2000 for Rs 44,000 now hold assets worth Rs 13.65 lakh—a return that far outpaces other investments. Yet this very success has priced out new buyers.