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The recent surge in gold prices to unprecedented levels in India, exceeding Rs 90,000 per 10 grams, marks a significant event in the commodities market. This surge, driven by a confluence of global factors, highlights the enduring appeal of gold as a safe-haven asset and a strategic investment. The escalating geopolitical tensions in the Middle East serve as a primary catalyst, pushing investors towards the perceived stability and security of gold amidst regional instability. Uncertainties surrounding global trade, stemming from ongoing trade disputes and the potential for increased tariffs, further amplify the allure of gold as a hedge against economic volatility. Moreover, anticipation surrounding the US Federal Reserve's monetary policy decisions adds another layer of complexity, influencing investor sentiment and driving demand for gold as a store of value. Anuj Gupta, Head of Commodities & Currencies at HDFC Securities, aptly emphasizes that the sustained increase in gold prices over the past five years is primarily fueled by burgeoning demand. This demand is not solely confined to individual investors seeking to protect their wealth but extends to central banks, particularly those of China and India, which have been actively increasing their gold reserves in response to prevailing global economic uncertainties. This strategic accumulation of gold by central banks underscores the metal's continued importance in maintaining financial stability and diversifying national reserves. The evolving perception of gold, transitioning from a traditional commodity primarily associated with jewellery to a preferred investment vehicle, is a crucial aspect of this price surge. Investors are increasingly recognizing gold's potential for capital appreciation and its ability to provide a buffer against inflation and currency fluctuations. This shift in perception has led to a significant increase in demand for gold bars and coins, reflecting a growing preference for physical gold as a tangible asset in an increasingly uncertain economic landscape. The global implications of this investment-driven demand are evident in the record-high gold prices observed across various markets. MCX prices have reached approximately Rs 88,350 per 10 grams, while international spot prices have soared to nearly $3,012 per ounce. These figures underscore the widespread recognition of gold's inherent value and its ability to maintain its purchasing power during times of economic stress. The upward trajectory of gold prices has prompted speculation among investors regarding the possibility of prices reaching Rs 1 lakh per 10 grams in the near future. This optimistic outlook is supported by the prevailing market dynamics, including sustained demand, geopolitical instability, and the potential for further economic uncertainties. However, it is essential to acknowledge that the gold market is subject to fluctuations and corrections, and investors should exercise caution and conduct thorough research before making investment decisions. In the short term, experts predict that gold prices could reach Rs 90,700 to Rs 91,000 per 10 grams on the Multi Commodity Exchange (MCX) by the end of the current financial year. Internationally, gold is expected to reach $3,200 per ounce during the same period. These projections highlight the potential for further gains in the gold market, but investors should remain vigilant and monitor market trends and fluctuations closely. Anuj Gupta's assertion that the trend remains bullish underscores the positive sentiment surrounding the gold market. He emphasizes that gold and silver have outperformed other asset classes since January 2025, further solidifying their position as attractive investment options. Gupta advises investors to adopt a systematic investment approach, initially investing a small portion of their capital and gradually increasing their holdings with each market correction. This strategy allows investors to capitalize on potential price dips and build a diversified portfolio that includes gold as a core asset. The bullish outlook for gold is further reinforced by ongoing global uncertainties, including geopolitical tensions, trade disputes, and concerns about inflation. These factors continue to drive demand for gold as a safe-haven asset, limiting supply even as prices surge. Geopolitical conflicts, such as the Hamas war, create safe-haven demand, while trade uncertainties stemming from potential tariff plans contribute to gold's appeal as a hedge against economic instability. The inherent nature of gold as an asset that is primarily held rather than sold further contributes to its price stability. As Gupta notes, "gold is not used for selling purposes; people are always buying gold for holding," which limits the supply available in the market and supports higher prices.
Source: 'Gold to stay bullish... in long-term horizon, it may test Rs 1 lakh': Anuj Gupta of HDFC Securities