Gold prices reach new highs as global uncertainties have fueled a surge in demand for the precious metal, following a brief pause in its recent rally. The trend of rising gold prices is driven by a weaker dollar, trade conflicts, and worries about global economic growth linked to U.S. President Donald Trump‘s tariff policies, which have made gold a popular choice for safe investment.
In the local commodities market, gold has reached Rs 95,000 per 10 grams, just 5% shy of the significant Rs 1 lakh mark. Will ongoing tariff issues continue to affect investor confidence and increase demand for this safe-haven asset, keeping gold prices on the rise?
Market opinions are split regarding the future of gold prices.
Before President Trump’s tariff announcement, gold prices were rising, supported by strong central bank purchases and fears of retaliation from major trading partners, which heightened demand for safe-haven assets and limited price drops. Investors have also preferred physical gold deliveries over cash settlements due to concerns that tariffs might disrupt shipments.
Experts predict that gold prices may continue to climb, with analysts from Bank of America forecasting that COMEX gold could reach $3,500 per ounce in the next two years, and Goldman predicts that gold prices could reach $3,300 per ounce by the end of 2025.
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Gold has reached new highs as the trade war and Federal Reserve Chair Jerome Powell’s actions increase demand for safe-haven assets. Risky investments like stocks, bonds, and currencies have experienced significant sell-offs, further driving up gold prices. However, some analysts believe that gold may be overvalued and could be due for a price correction.
Research firm Morningstar has a very pessimistic view, suggesting that gold prices could drop by 40% over the next few years. Analysts expect the price of gold to drop to around $1,820 per ounce. If this happens in the local market, it could lead to gold costing between Rs 55,000 and Rs 56,000 per 10 grams, provided the rupee maintains its upward trend against the dollar, the current price is at Rs 85.5.
Morningstar attributes the potential price drop to an increase in gold supply that may outpace demand. As gold mining becomes more profitable, countries worldwide are increasing production, and gold recycling is also on the rise.
The company also thinks that central banks might reduce their buying of gold soon. Gold prices reach new highs as global uncertainties continue to escalate, driven by a weaker dollar and ongoing trade tensions. This increase shows that more investors are turning to gold as a safe investment due to worries about economic stability and geopolitical issues. Investor enthusiasm for gold could wane, as worries about the economy tend to be temporary influences on gold prices.
Patel disagreed with this outlook, stating, “A 40% drop in gold prices would only occur if there were no trade wars, the global economy was growing, stock markets were at record highs, and there were no geopolitical issues. We don’t foresee such a situation happening.”
Gold prices have increased by 8% since April 7, 2025, reflecting a positive sentiment in the market, according to Jateen Trivedi, VP Research Analyst at LKP Securities. This rise suggests that investors are responding favorably to current economic conditions. “With cautious risk appetite and investors closely monitoring global events, we expect continued volatility,” he added.
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