In 2025, Indian investors are increasingly turning to precious metals as a hedge against economic uncertainties and global volatility, while closely monitoring the Reserve Bank of India's (RBI) monetary policy decisions. This trend is fueled by a combination of factors, including concerns over global tariffs, a weakening rupee, and fluctuating stock markets.

Metals as a Safe Haven

As of September 2025, both gold and silver prices have surged to unprecedented highs in the Indian market. This rally underscores the safe-haven appeal of precious metals, offering investors a hedge against inflation and currency fluctuations. Several factors contribute to this bullion boom:

• Global Economic Uncertainty: Persistent inflation concerns, expectations of a global economic slowdown, and potential stagflation are driving investors toward safe-haven assets.
• Geopolitical Tensions: Ongoing conflicts and trade turmoil amplify the appeal of gold and silver as safe stores of value during periods of instability.
• US Federal Reserve's Stance: Anticipated interest rate cuts by the US Federal Reserve in late 2025 have further boosted the attractiveness of precious metals.
• Weakening Rupee: A depreciating Indian rupee increases the domestic prices of imported gold and silver, making them more attractive to Indian investors.
• Strong Industrial Demand: Silver's unique role in renewable energy, electronics, and jewelry provides a strong fundamental underpinning, especially as industries ramp up post-pandemic demand.

Gold and Silver Price Performance

Gold prices in India have seen a substantial increase in 2025. As of September 25, 2025, 24-carat gold was trading at approximately ₹1,12,800 per 10 grams, marking a double-digit percentage increase compared to the previous year. By September 30, 2025, the price had climbed to ₹11,831 per gram. Some experts predict that 24-carat gold could reach ₹150,000 per 10 grams by 2030.

Silver has also demonstrated impressive growth, reaching around ₹1,34,080 per kilogram and even touching ₹1.40 lakh per kilogram in some markets. On September 29, 2025, silver futures surged to a 14-year high, trading at ₹1,44,179 per kilogram. Some analysts project global silver prices to reach $77 in 2027 and $82 by 2030, with some even forecasting $100 per ounce or higher.

Throughout 2025, silver's rapid ascent has outpaced gold's gains, with prices climbing more than 65% year-to-date, compared to gold's approximately 49% gain.

RBI's Monetary Policy Decisions

The RBI's monetary policy decisions play a crucial role in influencing market sentiment and investment strategies. The Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, is tasked with balancing inflation trends, global uncertainties, and fiscal reforms.

On October 1, 2025, the RBI's MPC is expected to announce its repo rate decision. According to a Bloomberg survey, 24 out of 38 economists expect the RBI to keep the repo rate unchanged at 5.5%, while 14 believe there is scope for a 25 basis point reduction.

The RBI has already cut rates by 100 basis points this year but chose to pause in August. While inflation trends provide space for easing, strong GDP data and uncertainty from global trade disputes make the current decision more complex.

Impact of Rate Decisions on Metal Investments

Central bank decisions, particularly by the US Federal Reserve, create significant effects across currency and precious metals markets. Interest rate increases typically strengthen the associated currency, increase the opportunity cost of holding long-term assets like gold, and lead to downward pressure on bullion prices in the short term. Conversely, interest rate cuts tend to weaken the currency and make precious metals more attractive.

Gold ETFs

Investor interest in gold ETFs (Exchange Traded Funds) continues to strengthen, as indicated by the steady growth in new accounts. In July 2025, 215,000 new folios were added, bringing the total to 7.86 million, a 42% year-on-year increase. The gold ETF market has grown to over ₹60,000 crore in assets under management, reflecting increasing investor interest in gold as an alternative investment.

In 2025 so far, gold ETFs have delivered an average return of 47%. The Nippon India ETF Gold BeES, the largest fund in the category, gained 47.07% in 2025 to date.