Key Points:
- Gold delivers stellar returns: Up 27% in H1 2025; 33% gain since April outperforming stocks and other investments.
- Key drivers: Central bank buying, global geopolitical tension, weak US dollar powered the rally.
- Analyst warning: Current rally might stall; investors advised to avoid fresh gold investment at these highs.
- Switch to silver: Experts tip silver as a better bet for short-term gains as global conditions stabilize.
- Gold’s performance: Price on MCX soared from Rs 76,772 to Rs 96,075 per 10 grams (Jan–June 2025).
New Delhi: Gold has lived up to its reputation as a safe-haven asset, delivering blockbuster returns to investors in 2025 amid ongoing uncertainty in the Indian stock markets. According to recent reports, between January and the end of June 2025, gold prices have leapt by 27% from around Rs 76,772 to Rs 96,075 per 10 grams on the Multi Commodity Exchange (MCX).
Zooming into the current financial year (April to June 2025), gold generated an even higher 33% return for investors, leaving behind most other traditional asset classes—including equities, real estate, and fixed deposits.
Why Did Gold Outperform?
Experts say several powerful forces fueled the uptrend:
- Aggressive central bank buying, especially from emerging economies, kept demand strong.
- Persistent global uncertainties ranging from geopolitical tensions to macroeconomic worries prompted investors to flock to safe assets.
- The US dollar index remained weak, further boosting gold’s appeal for international buyers.
“With equities volatile, gold has become the go-to choice for risk-averse investors. The metal’s strong run was also supported by dovish global monetary policy and robust retail demand,” said commodity analyst Rahul Kalantri of Mehta Equities.
Time to Take Profits? Experts Advise Caution
Looking forward, experts caution that the spectacular rally in gold could pause or see a temporary correction. As global economic conditions start to improve, inflation worries recede, and the US Federal Reserve hints at possible interest rate cuts, the powerful tailwinds supporting gold are showing signs of weakening.
experts advises, “For those who entered early, this is a good time to book profits. New investors should wait for a correction or look to diversify into other assets. Silver, with its industrial demand and stronger upward potential in the short term, offers an attractive alternative.”
Should You Invest in Gold Now?
- Short-term investors: Cautioned against buying at current high prices; a short-term pullback is possible.
- Long-term holders: Could consider booking partial profits while maintaining some exposure for portfolio balance.
- Looking for opportunities: Silver may offer better short-term prospects as industrial activity picks up globally.
Silver: The New Favourite?
As attention shifts, silver is increasingly being recommended for its potential in the near term supported by economic recovery, rising industrial use, and a more attractive risk-reward profile.
Bottom Line
Gold has handsomely rewarded patient investors this year, but with the rally looking stretched, the consensus is to tread carefully. Keep a close eye on global cues, and if seeking fresh opportunities consider diversifying into silver, which analysts say could be the next precious metal in the spotlight.
