Gold glitters with 11% surge in 2025, beats equities and bitcoin. Is there more room for upside?

Gold has continued its strong upward momentum in 2025, gaining 11 per cent year-to-date (YTD), outpacing both equities and Bitcoin. Ventura Securities anticipates a continued rally in gold, forecasting a price of USD 3,000 per ounce, with the possibility of surpassing USD 3,080 in Q1 2025. Meanwhile, the benchmark Nifty has declined over 3 per cent, while Bitcoin has posted modest gains of around 3 per cent so far this year.

Factors Behind Rally in Gold Prices

According to Ventura Securities, the precious metal’s strength stems from multiple factors, including heightened safe-haven demand, ongoing geopolitical tensions, inflation concerns, and central bank policies. Strong purchases from both central banks and retail investors have further fueled the rally.

Gold has been setting record highs almost daily. After rising 13 per cent in 2023 and 27 per cent in 2024, the rally has continued into 2025 with an 11 per cent increase year-to-date. The gold price today stands at USD 2,933 per ounce, while in India, it has reached ₹86,810 per 10 grams. The price of 22-karat gold per gram is currently ₹7,882. Notably, gold hit a record high of USD 2,942.70 per ounce on February 11.

Despite a strong dollar and rising bond yields, gold remains resilient. Ventura Securities noted that increased U.S. trade tariffs have amplified economic uncertainty, further driving demand for the safe-haven asset. Speculation about potential tariffs on gold has also led to a surge in physical gold purchases across London, Switzerland, and Asia in anticipation of possible new levies in the U.S.

Moreover, gold’s strong performance has been bolstered by robust central bank demand. In 2024, central banks acquired 1,045 tons of gold, marking the third consecutive year of purchases exceeding 1,000 tons. Over the last three years, central banks have accumulated more gold than in the six years before 2022. Ventura Securities highlighted that central banks are expanding gold reserves to counter anticipated fiscal deficits and hedge against rising inflation risks.

Challenges to Gold’s Rally

While gold’s outlook remains bullish, Ventura Securities pointed out that strength in U.S. Treasury yields and a firm dollar could act as headwinds. Federal Reserve Chair Jerome Powell has maintained a cautious stance, signalling no urgency to cut interest rates. Powell reiterated that U.S. monetary policy had already undergone significant easing, with 100 basis points of rate cuts in 2024, bringing rates down from 5.50 per cent to 4.50 per cent.

Higher interest rates reduce the appeal of non-yielding assets like gold. Additionally, rising inflation in the U.S., partly due to tariffs, could limit the Fed’s ability to cut rates further. CPI inflation data for January stood at 3.0 per cent year-on-year, slightly up from 2.9 per cent in December. A stronger-than-expected inflation reading could strengthen the U.S. dollar, potentially dampening gold’s momentum.

Powell emphasised that monetary policy would remain restrictive if inflation does not move sustainably toward the 2 per cent target. However, he also noted that the Fed could ease policy if the labour market weakens or inflation declines faster than anticipated.

Technical Outlook

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, observed that gold’s rally has been driven by a weaker dollar index and continued support from U.S. trade policies. On the MCX, gold rose by ₹475 to ₹86,280, while COMEX gold gained USD 18 to trade at USD 2,935. Market participants are now eyeing upcoming U.S. retail sales and core retail sales data, which could influence gold’s next move.

From a technical perspective, gold remains in a bullish trend, with ₹85,750 serving as a key support level and ₹87,000 as the next resistance target. As uncertainties persist in the global economy, analysts expect gold to remain a favoured asset among investors.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.