Gold Prices Surge Towards 1 Lakh: Should you buy or sell?
In a remarkable turn of events, gold prices in India have surged to unprecedented levels, approaching the 1 lakh per 10 grams mark. This significant rise has captured the attention of investors and analysts alike. But what factors are driving this surge, and what does it mean for potential investors? Let’s have a look-
The Meteoric Rise of Gold Prices
As of early 2025, gold prices have experienced a substantial increase. In January, the price was approximately 77,700 per 10 grams. By March, it had escalated to 91,950, marking a rise of over 14,000 in just two and a half months. This upward trajectory has led experts to predict that gold may soon breach the 1 lakh threshold. Experts believe that fundamentally markets are pricing in increased geopolitical risks, fuelled by US President Donald Trump.
Key Drivers Behind the Surge
Several factors are contributing to the escalating gold prices:
- Global Economic Uncertainty: Tensions in regions like West Asia and trade policy shifts, such as those under the Trump administration, have heightened economic uncertainties. This has led investors to seek safe-haven assets like gold.
- Central Bank Purchases: Countries, including China and India, have been increasing their gold reserves, signaling a shift towards gold-backed financial strategies.
- Weakening Rupee: The Indian Rupee’s depreciation against the US Dollar has made gold imports more expensive, thereby driving up domestic prices.
- Inflation Hedge: With rising inflation, gold is perceived as a reliable hedge, preserving purchasing power over time.
Expert Predictions and Investment Outlook
Analysts suggest that if current trends persist, gold could reach 1 lakh per 10 grams within the next 1 to 2 years. Rahul Kalantri from Mehta Equities indicates that this milestone is achievable in the near future.
Subhash Chandra Garg, former finance secretary of India, concurs, stating that gold prices may reach this level within six months to a year, provided the current economic conditions remain unchanged.
Investment Strategies in the Current Market
For investors considering gold as an asset class, several avenues are available:
- Physical Gold: Purchasing gold jewellery or coins remains a popular choice. However, it’s essential to account for making charges and purity.
- Gold ETFs and Sovereign Gold Bonds: These financial instruments offer exposure to gold prices without the need for physical storage. They also come with tax benefits and are more liquid.
- Gold Futures: For experienced investors, trading in gold futures can be profitable, though it carries higher risk.
The ascent of gold prices towards 1 lakh per 10 grams is a testament to the metal’s enduring appeal as a safe investment. While the future remains uncertain, the current indicators suggest that gold will continue to be a valuable asset in an investor’s portfolio.
Disclaimer: It’s advisable to consult with a financial advisor to tailor investments to individual risk profiles and financial goals.