Analysts attribute the rally to a combination of economic uncertainties, anticipated monetary easing, robust central bank purchases, and significant inflows into gold-backed exchange-traded funds (ETFs).
OANDA senior analyst Kelvin Wong noted that while US-China trade tensions contribute, the primary driver is rising bets on continued Fed interest rate cuts, which reduce opportunity costs for non-yielding assets like gold. Philadelphia Fed chief Anna Paulson added that increasing labor market risks strengthen the case for rate reductions, further supporting precious metals.In India, gold’s demand is reinforced by festive spending, currency fluctuations, and its traditional role as a hedge against inflation.
Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), highlighted that both retail and institutional investors are supporting the rally.
“Given India’s festive season and geopolitical risks, gold prices may continue their upward trend, although short-term corrections are possible,” she said.
Darshan Desai, CEO of Aspect Bullion & Refinery, emphasised that despite easing tensions in West Asia and a stronger US dollar, investors remain cautious.“Prices are likely to stay elevated as long as central banks keep buying gold and ETF inflows remain strong. Those who have already profited may consider booking gains,” he advised.
From an investment perspective, experts recommend a disciplined, systematic approach.
Swapnil Aggarwal, Director at VSRK Capital, suggested that investors hold existing positions and enter the market gradually.
“For new investors, dividing an investment into multiple smaller transactions allows them to benefit from short-term price fluctuations without accumulating excessive risk,” he said.
High-risk investors may allocate a larger portion now, while silver, though offering higher potential returns, carries greater volatility due to limited market size and no central bank support.
Bank of America and Societe Generale analysts forecast gold could reach $5,000 an ounce by 2026, while Standard Chartered has raised its 2026 average target to $4,488 an ounce.
–With Reuters inputs
