On 25th February 2025, gold prices increased by ₹350, taking the precious metal to retake the ₹89,000 per 10 grams mark in the capital city. The rally brings gold to within a tempting distance of its all-time record, driven by a mix of international economic currents, geopolitical risks, and firm domestic demand.
The rally, which was covered extensively by financial news sources, highlights gold’s continued popularity as a safe-haven investment during periods of uncertainty. Let us examine the forces behind this surge, its meaning for consumers and investors, and what the future holds for the price of gold.
The Price Movement: A Closer Look
The recent spurt saw 99.5% purity gold rise from ₹88,350 to ₹88,700 per 10 grams, while the price in the wider market reached ₹89,100, as per the All India Sarafa Association. Gold of 99.9% and 99.5% purity had reached record highs of ₹89,450 and ₹89,050 per 10 grams, respectively, just last week.
This latest surge reinforces gold’s uptrend in 2025, a year which has already witnessed the metal climb by more than 12.6% on a year-to-date basis in India, with prices rising higher than ₹10,000 from January 1. Internationally, gold too has been in a tear, with spot prices inching towards $3,000 per ounce, as spurred by similar macroeconomic trends.
Why Is Gold Rising?
There are a few interlinked factors driving this upsurge. To begin with, geopolitical and trade tensions are at the top of the list. Analysts cite ongoing uncertainties such as the threat of tariffs from the U.S. under the Donald Trump-led administration and retaliation from nations like China.
The latter has unsettled global markets, prompting investors into safe-haven assets such as gold to cover against uncertainty. Saumil Gandhi, HDFC Securities’ Senior Commodities Analyst, commented, “Gold traded with a modest gain as geopolitical and trade tensions continued to provide a safe haven demand.”
Second, central banks across the globe are increasing their gold holdings. The World Gold Council has announced that central bank buying topped 1,000 tonnes in 2024 and that trend continued in 2025 as governments try to diversify out of the U.S. dollar amidst economic uncertainty. This continuous shopping binge adds a structural component of support to the price of gold, further enhancing its role as a stable store of value.
Third, a declining U.S. dollar and decreasing Treasury yields have increased the appeal of gold. As the dollar weakens, gold—denominated in dollars worldwide—becomes less expensive for other currency holders, stimulating demand.
Likewise, decreasing yields on U.S. Treasuries lowers the opportunity cost of holding non-yielding assets such as gold, further enhancing its attractiveness. In India, the rupee’s drop to a record low of 87.94 per dollar has boosted domestic gold prices, making imports expensive and aiding the rally.
Domestic Dynamics in India
India, the world’s largest consumer of gold, has a special affinity for the metal. Apart from its investment appeal, gold is deeply rooted in culture, particularly during wedding seasons and festivals. The timing of this price rise, near the close of the financial year, may have an impact on buying behaviour. While prices may discourage some retail consumers, the momentum indicates that investors and institutions are not fazed, seeing gold as a hedge against inflation and currency devaluation.
The Indian Multi Commodity Exchange (MCX) also followed suit, with gold prices in the spot market crossing ₹85,000 in earlier February before rising further. This domestic strength follows global leads but also reflects India-centric influences such as import prices and demand from jewellers gearing up for forthcoming festive periods.
Implications for Consumers and Investors
For investors, the ongoing rally comes with opportunity and caution. Gold’s rise to ₹89,000 and its near-record highs indicate scope for further appreciation, with some experts—such as Citi and UBS—forecasting that global prices may reach $3,000 per ounce by the end of the year.
In rupee terms, this could take local prices above ₹90,000 or even ₹95,000 if the currency continues to depreciate. Still, the Relative Strength Index (RSI) closing in on overbought levels indicates potential short-term retracement, presenting a buying opportunity to those patiently waiting on the sidelines.
For buyers, especially those in the process of jewelry buying, the situation is less auspicious. With making charges and GST driving the effective price of a sovereign (8 grams) well over ₹70,000 in certain areas, affordability is increasingly becoming an issue.
However, cultural demand tends to take precedence over price sensitivity in India, guaranteeing a minimum level of purchase even at higher levels.
What Lies Ahead?
The gold view remains bullish but not riskless. If it comes to full-blown trade wars or surprise inflation readings due in early March reveal a big jump, there is little problem for gold surging past existing highs and proceeding towards $3,000 globally, which corresponds to new heights in India. Investor sentiment and central bank appetite will remain deciding factors. Suddenly resolved geopolitics or a massive increase in Treasury yields, though, might snap the rally’s thread, unleashing a pullback.
Domestically, gold is expected by analysts to move between ₹84,000 and ₹86,500 in the near term, with room to run higher in case risk-off sentiment increases.
How well it is able to remain above ₹89,000 will be an important test of its strength and an indicator of whether it can extend this momentum through the spring.
A Historical Perspective
Gold’s 2025 performance follows up on its fantastic performance in 2024 when it gained close to 40% from January’s $2,063 an ounce to well over $2,800 year-end. Prices in India have increased 32% over the last year from ₹57,200 per sovereign to current levels.
This is following historical trends where gold flourishes in periods of economic and political turmoil, from the financial crisis of 2008 through the COVID-19 pandemic. Today’s drivers—currency fluctuations, trade wars, and central bank policies—are echoes of these historical catalysts, which suggests that gold’s rally has legs yet.
Conclusion
Gold’s move to ₹89,000 for 10 grams is more than a news headline—it’s a testament to a world that is trying to find certainty amidst confusion and a metal that is finding its mettle as an ageless asset. For India, it’s a story of investment acumen and cultural fervor.
As gold nears its record high, all eyes are on the forces that will either propel it further or pause its ascent. Whether you’re an investor eyeing the charts or a bride-to-be eyeing a necklace, gold’s journey in 2025 is one to watch closely.