Global Uncertainties Propel Gold Prices: A Gleaming Prospect?

US tariff changes and global market trends may lead gold prices to soar up to Rs 96,000 by late 2025. Central bank strategies and festive demands are likely to influence gold's appeal. Meanwhile, ETF inflows remain robust, reflecting sustained investor interest amid geopolitical shifts.

Gold prices are projected to rise significantly amid global tariff uncertainties, with ICICI Bank Global Markets forecasting rates reaching Rs 87,000 to Rs 90,000 in the first half of 2025. The current rates stand at Rs 83,410 per 10 grams for 22-carat and Rs 90,990 per 10 grams for 24-carat, according to publicly available data.

These uncertainties, leading to increased investment-driven demand, are primarily attributed to the Trump administration's plans to impose reciprocal tariffs starting April 2 under the 'Fair and Reciprocal Plan'. In India, gold prices increased by 4% last month, driven by global trends and a 2% appreciation of the rupee against the US dollar.

Gold prices are expected to trend upwards, potentially reaching Rs 94,000 to Rs 96,000 in the latter half of 2025. Globally, prices might touch USD 3200 to USD 3400 per ounce by December 2025. Factors such as potential US Federal Reserve rate cuts and central bank reserves diversification could stabilize long-term prices, despite jewellery demand pressures.

Gold imports have declined significantly due to elevated prices and subdued jewellery demand, yet festive demand could lead to a rebound. Concurrently, gold ETF inflows remain strong, with Rs 19.8bn recorded in February 2025, surpassing the average seen in prior months, indicative of persistent investor confidence in gold.

(With inputs from agencies.)