New Delhi [India], October 16 (ANI): Gold prices continued their strong rally in 2025, driven by global fiscal worries, a weakening U.S. dollar, and robust institutional and central bank buying, according to a report by Religare Broking. The precious metal has delivered over 65% returns this year, marking one of the highest gains in recent years, as investors seek a safe haven amid mounting market uncertainty. At the time of the report, 24kt gold in Delhi was trading at Rs 1,28,110 per 10 grams.
The rally is being fuelled by concerns over fiscal discipline and rising government debt, particularly in the United States, which has unsettled financial markets. Investors are increasingly wary of debt sustainability, reflected in higher U.S. Treasury yields and widening swap spreads. These conditions have prompted a shift toward gold as a reliable hedge against currency depreciation and market volatility.
A nearly 10% weakening of the U.S. dollar in the first half of 2025 has further bolstered gold prices, making the metal cheaper for investors holding other currencies. In India, the rupee has depreciated around 5% this year due to a widening trade deficit and foreign capital outflows, pushing domestic gold prices to new highs. Despite elevated prices, demand has remained steady, supported by gold’s cultural significance and its role as a financial safeguard.
Central banks have also contributed to the bullish trend, with global purchases exceeding 1,000 tonnes for the third consecutive year in 2024. China added 13 tonnes in the first quarter of 2025, while India maintained reserves of around 880 tonnes as of late August. Poland’s reserves have risen to 509.3 tonnes, surpassing even the European Central Bank’s holdings.
The report suggests that continued central bank buying and persistent fiscal stress across major economies are likely to support gold prices in the near term. Investors are advised to adopt risk management strategies and consider staggered buying, particularly on dips toward Rs 1,14,000–Rs 1,18,000 per 10 grams, while the upside potential could reach Rs 1,42,000. A fall below Rs 1,05,000, however, may trigger a deeper corrective phase.
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