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In India, the price of 24-carat gold surged to ₹78,340 per 10 grams, according to Goodreturns.
Rahul Kalantri, Vice President, Commodities at Mehta Equities, noted, “Gold prices started 2025 on a strong note, with ongoing geopolitical tensions and economic uncertainties fueling safe-haven demand.”
Other factors driving gold prices
Weaker US dollar: The dollar index fell 0.2%, making gold more affordable for non-dollar investors.
Analysts believe any further dollar weakness could support gold’s upward trajectory.
Geopolitical uncertainty: Escalating tensions, including Israeli airstrikes in Gaza and a drone attack in Kyiv, have reinforced gold’s appeal as a hedge.
Monetary easing:
Central banks, including the US Federal Reserve and ECB, shifted toward easing policies in 2024. Lower interest rates make gold more attractive as it does not yield interest.
Central bank buying: Central banks globally purchased significant gold reserves in 2024. India alone added 77 tonnes, underlining gold’s role in risk management.
Inflation hedge: Expectations of inflationary pressures due to S policies and trade wars under President-elect Donald Trump have further boosted gold’s allure.
Outlook for 2025
Experts remain optimistic about gold’s performance in 2025.
Renisha Chainani, Head of Research at Augmont, projects gold prices to touch $3,000 (₹85,000 per 10 grams) per ounce, with a strong support level at $2,500 per ounce (₹73,000 per 10 grams).
Chainani advises investors to allocate at least 10% of their portfolio to gold and silver for better risk-adjusted returns.
“The long-term view remains favorable for the next 5-6 months, with prices expected to oscillate but trend upwards,” she said.
She further asks investors to adopt a ‘buy on dips’ strategy as gold demonstrates stability amidst uncertainties.
First Published: Jan 3, 2025 10:32 AM IST
