Key Points
- Gold prices hit record highs, surging from $1,500 in October 2022 to over $3,500 per ounce in April 2025.
- RBI raises gold loan-to-value (LTV) ratio to 85% for loans up to ₹2.5 lakh, making it easier for small borrowers to access credit.
- Gold delivered up to 125% returns in the last 2 years and 8 months, and over 50% in the past year.
- Major banks predict further gains: Goldman Sachs, JP Morgan, and Citi forecast gold could reach $4,000–$4,500 per ounce by late 2025 or early 2026.
- Central banks and investors drive demand, with global uncertainties, inflation fears, and trade tensions fueling the rally.
New Delhi: Gold is glittering brighter than ever for Indian investors, with prices smashing records and new Reserve Bank of India (RBI) guidelines making gold loans more accessible than before. This surge comes amid a global rush for safe-haven assets, ongoing geopolitical tensions, and rising inflation fears.
Gold Prices Skyrocket: 125% Returns in Under 3 Years
Gold prices have soared from $1,500 per ounce in October 2022 to a historic high of $3,500 by April 2025. Over the last 2 years and 8 months, gold has delivered a staggering 125% return, with more than 50% gains in just the past year. Over a decade, the yellow metal has yielded returns of about 180%.
RBI Raises Gold Loan LTV: Easier Credit for Small Borrowers
In a major relief for small borrowers, the RBI has raised the loan-to-value (LTV) ratio for gold loans up to ₹2.5 lakh to 85%, up from the previous 75%. Loans between ₹2.5 lakh and ₹5 lakh will have an LTV of 80%, while loans above ₹5 lakh remain capped at 75%. This means, for example, if you pledge gold worth ₹2.5 lakh, you can now borrow up to ₹2.12 lakh instead of ₹1.87 lakh.
The RBI has also simplified paperwork for smaller loans, eliminating the need for credit checks and easing end-use monitoring for non-priority sector lending. The move is expected to boost credit access, especially for small businesses and households, and has already sparked a rally in gold loan company stocks.
Why Is Gold Booming?
- Central banks worldwide have been aggressively increasing their gold reserves since 2022, seeking safety amid economic and geopolitical uncertainty.
- Investor demand for gold ETFs is surging, as gold is seen as a hedge against inflation and currency volatility.
- Supply has struggled to keep up with demand, further fueling price increases.
What’s Next? Bold Forecasts from Global Banks
Market experts and top research houses remain bullish on gold:
| Institution | 2025/2026 Target Price (per ounce) | Rationale |
|---|---|---|
| Goldman Sachs | $3,700–$4,500 | Central bank demand, safe-haven flows, inflation fears |
| JP Morgan | $4,000 by Q2 2026 | Recession risk, trade war, strong central bank buying |
| Citi Research | $3,500 (achieved), new target awaited | Chinese demand, safe-haven buying, tariff risks |
Goldman Sachs believes that in a high-risk scenario, gold could even touch $4,500 per ounce by the end of 2025. JP Morgan expects gold to average $3,675 in late 2025 and cross $4,000 by mid-2026, citing robust demand from both investors and central banks.
Outlook: Will the Rally Continue?
While no forecast is certain, most analysts agree that gold’s bullish momentum could persist as long as global uncertainties, inflation concerns, and demand from central banks remain strong. However, any unexpected drop in central bank buying or a sharp recovery in the global economy could temper the rally.
With gold at historic highs, easier access to gold loans, and bullish forecasts from global banks, 2025 is shaping up to be a landmark year for gold investors and borrowers alike.
