Gold prices in India have risen dramatically over the last year. As of September 25, 2025, the price of 24-karat gold is Rs. 11,679 per gram, or Rs. 1,16,790 per 10 grams. This shows an increase of 51.81 percent in one year.
The returns on the equity markets, in contrast, have been negative. This year, the Sensex has declined by 4.25 percent, while the Nifty 50 index has fallen by 3.86 percent. This difference shows that gold gave better returns than stocks during this time.
Factors Driving Gold Prices Higher
- Geopolitical Tensions: In this year, the U.S. imposed a 50 percent tariff on Indian exports and raised H-1B visa fees, affecting various sectors and businesses. This created economic uncertainty and caused equity markets to fall. As a result, investors moved towards gold as a safe investment, and its demand pushed gold prices higher.
- Weakening U.S. Dollar: A falling US dollar makes gold more affordable for buyers using other currencies. This boosts international demand and drives up prices in India.
- Central Bank’s Gold Holdings: Central banks, especially in Asia, increased their gold reserves by 1,037 tonnes in 2024 to hedge against dollar volatility, inflation, and geopolitical risks. India’s RBI was among the top three buyers, adding 72.6 tonnes to take total holdings above 800 tonnes, reflecting efforts to diversify foreign exchange reserves and strengthen financial stability.
- Inflation: Due to ongoing inflation in major economies, such as India, which has decreased purchasing power, investors are looking to gold as a hedge against currency devaluation. This trend is now even more pronounced due to rising fuel, commodity, and other prices.
- Festive Seasons and Marriage: In India, cultural and religious occasions like Dussehra, Diwali, and weddings significantly boost gold purchases. Festivals and marriage seasons in India contribute to higher physical demand, resulting in price momentum.
Also Read: Smallcap stock in focus after acquiring Italy-based Citieffe Group for ₹324 Cr
Will Gold Cross Rs. 1.2 Lakh in 2025?
- Geopolitical Instability: If India and the United States resolve their trade issues, business between countries will improve, markets will stabilize, and gold prices may stop rising as investors return to equities and traditional investments.
- Central Bank Policies: Ongoing interest rate cuts by major central banks could further weaken fiat currencies, making gold more attractive.
- Domestic Demand: The upcoming Diwali season could see increased gold purchases, providing additional upward pressure on prices.
However, demand for gold may slow down and prices may stabilize or decline if geopolitical tensions subside and central banks begin to scale back their supportive policies. A stronger global economy and less purchasing by central banks could make gold less appealing as a secure investment.
Conclusion
Even though gold has given remarkable returns in this year, a number of domestic and international factors will determine its future. Investors should keep an eye on domestic demand patterns, central bank policies, and geopolitical developments to determine whether gold will likely reach Rs. 1.2 lakh per 10 grams in 2025.
Written By Akshay Sanghavi
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
