Gold costs leap 32% in FY25; can they hit ₹1 lakh mark in FY26?

Monetary yr 2024-2025 was a golden yr for gold. As per MCX knowledge, Indian spot gold costs surged 32 per cent in FY25, considerably outperforming the fairness benchmark Nifty 50 which gained slightly over 5 per cent.

On March 28 final yr, gold costs had been close to ₹67,000 per 10-gram mark, which has surged to close ₹88,700 degree. Within the derivatives section, MCX Gold on March 28 settled 0.05 per cent up at ₹88,850 per 10 grams.

Worldwide gold costs are additionally at document highs as a result of elevated safe-haven demand and issues over the worldwide commerce battle triggered by US President Donald Trump’s aggressive tariff insurance policies.

What drove gold costs in FY25?

A number of elements acted collectively to propel gold costs to record-high ranges during the last yr.

Expectations of price cuts by the US Federal Reserve, sturdy shopping for by central banks, fluctuating macroeconomic indicators and geopolitical uncertainties have been the principle drivers of gold costs for the final one yr.

Trump’s tariff insurance policies have raised fears that the world is heading to a serious commerce battle, driving up inflation and puncturing world progress momentum.

All these have boosted gold’s demand because the yellow steel is taken into account a hedge in opposition to inflation and uncertainty.

“Gold costs in FY25 surged as a result of a number of elements, together with geopolitical tensions, central financial institution purchases, and financial coverage shifts. Escalating conflicts and commerce uncertainties, significantly Trump’s tariff insurance policies, drove safe-haven demand,” Renisha Chainani, the pinnacle of analysis at Augmont, noticed.

Chainani underscored that central financial institution shopping for, led by China and different rising markets, additional tightened provide. Expectations of US Federal Reserve price cuts weakened the greenback, making gold extra engaging. Persistent inflation issues and fears of financial slowdown additionally fueled demand.

Volatility within the inventory market and commodities as a result of geopolitical elements and Trump’s tariffs additionally pushed traders towards gold as a hedge.

Can gold costs hit ₹1 lakh mark in FY26?

The important thing constructive elements by way of world uncertainty and central financial institution shopping for nonetheless persist for gold costs, elevating speculations that home gold costs might leap to the touch the coveted ₹1 lakh per 10 grams mark within the new monetary yr 2025-2026 (FY26).

“Gold’s outlook for FY26 stays bullish, pushed by geopolitical uncertainty, central financial institution shopping for, and potential US Federal Reserve price cuts. Central banks, significantly in rising markets, are anticipated to proceed stockpiling gold, supporting costs. If rates of interest decline, a weaker greenback might additional increase gold demand to the touch $3,200,” stated Chainani.

Moreover, inflation issues and financial slowdown dangers might proceed driving traders towards gold as a safe-haven asset.

Nevertheless, most of those positives are pretty discounted within the present gold costs, and the yellow steel would want recent triggers to the touch the ₹1,00,000 mark.

Gold costs might consolidate at greater ranges with out recent triggers as a result of demand fatigue and revenue reserving.

Moreover, a rebound within the inventory market and the greenback might considerably problem gold costs.

Consultants say the yellow steel might attain that degree if there’s a deeper commerce battle, recent escalations in tensions within the Center East or Russia-Ukraine entrance, and macroeconomic indicators present indicators of stagflation within the US.

In accordance with Chainani, present forecasts and market situations recommend home gold costs in India might attain roughly ₹95,000 per 10 grams by the top of FY26.

This projection is influenced by a number of elements, together with world financial uncertainties, inflationary pressures, and central financial institution insurance policies, which proceed to drive demand for gold as a safe-haven asset.

“Whereas these elements assist a bullish development, reaching the ₹1,00,000 per 10 grams mark would require extra catalysts, corresponding to vital foreign money depreciation or heightened geopolitical tensions. Whereas a considerable improve in gold costs is anticipated, surpassing ₹1,00,000 per 10 grams in FY26 seems much less probably beneath present projections,” stated Chainani.

Whereas gold costs might see short-term corrections, the long-term fundamentals recommend the yellow steel will proceed attracting traders’ curiosity in FY26.

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Disclaimer: This story is for instructional functions solely. The views and suggestions above are these of particular person analysts or broking corporations, not Mint. We advise traders to examine with licensed consultants earlier than making any funding choices, as market situations can change quickly, and circumstances might differ.