Gold prices are on a tear in 2025, surging to historic highs as a cocktail of global risks and economic uncertainty pushes investors toward the safe haven of the yellow metal. Amid volatile equity markets and stubborn inflation, gold has emerged as one of the year’s top-performing assets—and just in time for Akshaya Tritiya.
Geopolitics and Global Anxiety: The Safe-Haven Spark
One of the primary catalysts behind gold’s ascent is rising geopolitical tension. Whether it’s the intensifying US-China rivalry or unrest in the Middle East, these flashpoints have ignited a global rush towards safer investments. As analysts often say, “Uncertainty fuels gold demand,” and 2025 has served up plenty of it.
Adding to the sentiment, SEBI-registered research analyst A.K. Mandhan recently noted on X that mounting fears of a global slowdown are contributing to the upward price trend. With sluggish economic growth in major economies such as the US, Germany, and China, the fear of recession—or worse, stagflation—is keeping investors on high alert.
Inflation Woes and Central Bank Gold Fever
Despite previous rounds of aggressive interest rate hikes, inflation remains persistent. As purchasing power erodes, gold is being increasingly seen as a reliable hedge. Central banks have also entered the fray in a big way. Nations like China, Russia, and India are hoarding gold at record levels—driven by the desire to reduce dependency on the US dollar. In fact, 2024 saw unprecedented central bank purchases, and the trend has carried over strongly into 2025.
Meanwhile, with expectations that the US Federal Reserve will begin cutting interest rates later this year, the dollar has weakened. A softer dollar makes gold cheaper for international investors, further boosting demand.
“Gold in 2025 isn’t just glittering—it’s glowing,” Mandhan commented, citing a “perfect storm of geopolitical stress, economic uncertainty, and shifting monetary strategies” as reasons behind the surge.
Retail Investors Join the Gold Rush
It’s not just institutions making a beeline for bullion. Retail investors are increasingly turning to gold—through ETFs, digital platforms, and traditional physical formats. In a year where equity markets have been jittery and bond yields unpredictable, gold offers a blend of emotional assurance and financial resilience.
Lower real interest rates are also tilting the balance in gold’s favor. As the opportunity cost of holding non-yielding assets drops, gold becomes more attractive for both short-term trades and long-term strategy.
De-Dollarisation & Supply Tightness: The Bigger Picture
A larger structural shift is underway too—de-dollarisation. Several countries and economic blocs are gradually reducing their reliance on the greenback, opting instead for gold as a neutral reserve asset in global trade.
On the supply side, things aren’t exactly rosy. Global gold mining output has plateaued, even as demand keeps climbing. This tightening of supply-demand dynamics is only adding more fuel to gold’s bullish fire.
Meanwhile, speculative traders are jumping on board. A surge in futures and options activity has helped push prices even higher, with sentiment turning increasingly bullish.
Silver’s Parallel Path
While gold takes the spotlight, silver isn’t far behind. According to Satish Dondapati, Fund Manager at Kotak Mahindra AMC, “Gold and silver have shown notable movements in 2025 due to trade tensions, interest rate expectations, geopolitical risks, and a weakening dollar.” He adds that gold has jumped over 25% this year, including a 6% spike after the US announced new tariffs in early April.
Dondapati believes that while silver prices have experienced some volatility, the long-term trend remains positive—bolstered by industrial demand, lower interest rate projections, and continued macroeconomic uncertainty.
