Bull run on gold prices has captured global attention in 2025. Over the past year, both international and Indian gold markets have seen record-breaking highs as investors flock toward the precious metal amid economic uncertainty and geopolitical tensions.
Reasons behind the bull run on gold in 2025 include inflation, weak dollar, and central bank buying.
Analysts believe the bull run on gold may continue if global uncertainties persist.
According to the World Gold Council, central banks across Asia have significantly increased their gold reserves in 2025.
Why have gold prices moved in the last year?
Dated 15.10.2025 : The price of gold has seen a significant and sharp upward movement over the last one year, both in the international and Indian markets.
Here’s a summary of the trend based on the latest available information
- International Market: Gold prices have surged, with the price per ounce crossing the $4,000 mark, hitting new all-time highs. Some sources indicate a surge of over 50% year-to-date (2025) and similar strong gains over the last 12 months.
- Indian Market: Domestic gold prices have also witnessed a massive rally, with some reports indicating an increase of over 60% in Indian Rupees (INR) over the last one year. Prices have recently been reported to be hovering around ₹1,22,000 to ₹1,30,000 per 10 grams for 24-karat gold.
The strong bull run on gold prices is attributed to a confluence of global factors that increase gold’s appeal as a “safe-haven” asset:
Primary Global Drivers (Affecting International Prices)
These factors increase the demand for gold as a safe-haven asset and a hedge against financial instability:
- Geopolitical Instability and Uncertainty: Ongoing global conflicts (like those in Ukraine and the Middle East), political tensions (such as US-China trade disputes), and general political uncertainty in major regions drive investors toward gold to preserve capital.
- Central Bank Buying: Central banks, particularly in emerging economies like China, India, and Turkey, have been accumulating gold at record levels. This institutional demand is a strategic move to diversify foreign reserves away from the U.S. dollar, which is viewed as a floor for prices.
- Inflation Hedge and Economic Uncertainty:
- Persistent inflation across major economies makes gold attractive as a store of value, as it tends to hold its purchasing power better than currency.
- Concerns about global economic slowdowns, potential recessions, and stock market volatility push investors toward the perceived safety of gold.
- U.S. Dollar Weakness and Interest Rate Outlook:
- Gold is globally priced in U.S. dollars. When the U.S. dollar weakens, it makes gold cheaper for buyers using other currencies, thereby increasing demand and pushing the dollar price up.
- Expectations of interest rate cuts by the U.S. Federal Reserve make interest-bearing assets like bonds less attractive, which increases the appeal of non-interest-bearing gold.
- Investment Demand: Significant inflows into gold-backed Exchange-Traded Funds (ETFs) and strong demand from institutional and retail investors globally create a “fear of missing out” (FOMO) driven surge.
Additional Drivers in India (Amplifying the Rise)
Indian gold prices are influenced by all the global factors above, but the domestic price is further amplified by:
- Currency Depreciation (Weaker Rupee): India imports the vast majority of its gold. When the Indian Rupee (INR) weakens against the U.S. Dollar (USD), it makes the landed cost of gold imports higher in Rupee terms, directly translating to a higher domestic price.
- Strong Domestic Demand: Gold holds immense cultural and traditional significance in India. High seasonal demand during major festivals (like Diwali and Dhanteras) and the wedding season consistently pushes up local prices.
- Import Duties and Taxes: Government-imposed import duties and the Goods and Services Tax (GST) are added to the international gold price, increasing the final retail price for the Indian consumer.
Note : The past performance of an asset is no guarantee for future trend and one should be cautious while investing in an asset
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