Gold prices have reached historic highs both internationally and in India, reflecting investors’ flight to safety amid mounting global economic uncertainties. In India, the price of 24-karat gold soared to Rs 93,390 per 10 grams, while 22-karat gold was priced at Rs 85,610 per 10 grams. Globally, spot gold exceeded the $3,200 per ounce threshold for the first time, with US gold futures trading at $3,237.50 per ounce. Gold has recorded all-time highs 20 times in 2025 alone, with brief corrections proving largely minor and temporary.
What’s driving gold’s rally?
Escalating trade tensions: The recent escalation in trade tariffs, particularly between the US and China, has made gold an appealing safe haven. These retaliatory measures have increased near-term demand for gold.
Weakening US dollar: The Dollar Index dropped below 100, making gold cheaper for non-dollar buyers. As a result, gold has notched record highs in nearly every major currency.
Central bank demand: Additionally, central banks worldwide have been significant contributors to this demand, purchasing over 1,000 tonnes of gold annually for the past three years. China’s gold acquisitions remain robust, marking five consecutive months of strong purchases by March 2025.
Recession concerns: Soft U.S. inflation data and dovish signals from the Federal Reserve have investors on edge about a potential slowdown.
Why should you go for gold?
Gold is often considered a safe investment during times of market volatility, with recent price increases reflecting a shift from equities to the precious metal.
Concerns regarding stagflation in the US — a situation where inflation rises amid stagnant economic growth — are further bolstering gold’s attractiveness.
The latest indications from the US Federal Reserve suggest the potential for two more interest rate cuts in 2025, supporting a bullish market outlook for gold.
Meanwhile, Chinese gold ETFs have reported record inflows, as global ETF inflows continue to rise, a trend that began in 2024.
Geopolitical tensions, such as the ongoing conflicts involving Russia and Ukraine, and the collapse of various ceasefires, continue to influence the demand for gold.
Moreover, the US national debt, having surpassed $36 trillion, along with global debt levels, is prompting investors to seek gold as a hedge against economic instability. As a tangible asset, gold remains a preferred choice amid this market volatility.
Market analysts maintain a positive outlook for gold, with several banks forecasting prices to remain high throughout 2025. Notably, Swiss Asia Capital predicts gold to reach $8,000 by 2028.
With uncertainties prevalent — ranging from trade disputes to geopolitical strife—gold’s standing as a stable investment appears assured. This enduring performance underscores its appeal amid fluctuating currency values and increased market risks.
