Gold prices have seen a historic rally in 2025, and analysts are now discussing whether this trend will continue, potentially pushing gold past the ₹1.5 lakh mark per 10 grams soon. Several factors are believed to be contributing to this potential surge.

Factors Influencing Gold Prices

• Global Economic Uncertainty: Persistent geopolitical tensions, tariff wars, and fears of recession are driving investors towards gold as a safe-haven asset. Gold tends to maintain or increase its value during economic downturns.
• Weakening US Dollar: Since gold is traded in US dollars, a weaker dollar makes gold cheaper for investors holding other currencies, boosting demand and prices.
• Interest Rate Cuts: Expectations of further interest rate cuts by central banks like the RBI and the Federal Reserve are making fixed-income investments less attractive, pushing investors towards gold.
• Inflation: High inflation pressures are pushing long-term investors toward gold, as it is seen as a hedge against the devaluation of currency.
• Rupee Depreciation: A declining rupee makes imported gold costlier in India, contributing to higher domestic prices.
• Strong Demand: India's cultural affinity for gold, especially during weddings and festivals, fuels strong retail demand.
• Central Bank Buying: Central banks worldwide are increasing their gold reserves, reducing the global supply and supporting prices.

Expert Predictions

Major institutions like the World Gold Council, Goldman Sachs, and Kotak Securities are optimistic about gold's prospects, projecting a further 20–30% increase in 2026. Based on these forecasts, gold prices could potentially reach ₹1.5 to ₹1.75 lakh per 10 grams. Kotak Securities specifically predicts gold prices to hit ₹1.5 lakh in 2026.

Sachin Jain, Regional CEO India for the World Gold Council (WGC), notes that global factors like interest rates and geopolitical tensions, combined with India's robust domestic demand, are driving gold's appeal as a safe-haven and inflation hedge.

Alternative Scenarios

While the outlook is largely positive, some factors could potentially dampen gold's rise. These include:

• Easing Geopolitical Tensions: If geopolitical risks subside, the demand for safe-haven assets like gold may decrease.
• Stronger US Dollar: A sharp strengthening of the US dollar could make gold more expensive for international buyers.
• Rising Interest Rates: An unexpected increase in interest rates could make fixed-income investments more attractive.

Investment Considerations

Indians have a long history of investing in gold, and it remains a popular option for long-term returns. Gold can be purchased in various forms, including jewelry, coins, bars, and ETFs.

Despite the potential for further price increases, investors should be aware of the risks and consider gold as a portfolio hedge rather than a short-term bet.

Historical Context

Gold prices in India have shown a long-term upward trend, rising from ₹63 per 10 grams in 1964 to over ₹94,000 per 10 grams by January 2026. This historical data reinforces gold's role as a safe-haven asset and long-term hedge.