Gold prices surge 45% in a year as safe-haven demand strengthens amid global uncertainty. Can it rally more?

Gold Price Today: Investors worldwide are increasingly turning to gold to protect their portfolios, reinforcing its reputation as a safe-haven investment during economic uncertainty, as reflected in the sharp surge in prices. 

The prices have been marching north over the last year without any notable pullback, clearly indicating that investors are concerned about the global economy, which is currently experiencing wars, geopolitical tensions, and inflationary pressures.

Adding to ongoing concerns, Donald Trump’s trade policies, which are designed to bridge the trade gap with trading partners, are further fueling uncertainty in global markets, supporting the rally in gold prices.

Amid this backdrop, gold prices have been touching record after record, with the latest peak of $2947 (spot) achieved in the previous trading session, taking the YTD gains to 12.24%. In under two months of the current calendar year, prices have registered 13 record highs, indicating that investors are quickly moving away from risky assets such as stocks to safer investments like gold.

Meanwhile, Trump’s trade policies have not only unsettled market sentiment but have also influenced the U.S. Federal Reserve’s decision to pause its rate-cut cycle in January, as policymakers decided to wait to assess how Trump’s policies will affect the economy.

The January Federal Reserve meeting minutes released on Wednesday showed that policymakers agreed they would need to see inflation come down more before lowering interest rates further and expressed concern about the impact President Donald Trump’s tariffs would have in making that happen.

Soaring gold prices push analysts to raise forecasts

Over the last year, the spot gold price has moved from $2,039 per troy ounce to the current trading price of $2,946, resulting in a stellar gain of 44.6%. In the domestic market, prices have jumped from ₹62,735 per 10 grams to ₹86,367, translating into a gain of 38%.

The prolonged rally has also led analysts to raise their price forecasts for the yellow metal, as previous targets have been surpassed earlier than expected. Recently, global brokerage firm Goldman Sachs lifted its year-end 2025 gold price forecast to $3,100 per ounce, up from the previous $2,890.

Likewise, UBS adjusted its 12-month gold price forecast to $3,000 per ounce, up from $2,850, while Citi set a new short-term gold price target at $3,000 per ounce, with its average forecast for the year now at $2,900, an increase from the previous $2,800.

Speculation rises over US return to gold standard

Recent reports have sparked speculation about a potential U.S. return to a gold-backed currency, which experts believe is unlikely, given the current fiat-based monetary system.

This speculation intensified after gold shipments from the London central bank to the U.S. surged dramatically in recent weeks, leading to significant delays in physical gold deliveries. The London bank is now experiencing waiting times of 4–8 weeks, a substantial increase from the typical 2–3 days, as per the recent media reports. 

The latest World Gold Council data showed that the U.S. accounts for the largest gold reserves in the world, with 8,133 tons, followed by Germany with 3,351 tons. India ranked seventh on the list, with reserves of 876 tons, while China stood in fifth place with 2,279 tons, the majority of its gold accumulation occurring in recent years.

Reports have also been circulating that BRICS nations – Brazil, Russia, India, China, and South Africa – are accumulating large quantities of gold to challenge the dollar’s dominance in global trade and establish their own currency for trade. Trump, however, has warned of 100% tariffs on BRICS nations if they attempt to establish a new reserve currency to rival the U.S. dollar.

Since assuming office last month, Trump has imposed a 10% tariff on Chinese imports, announced and later delayed 25% tariffs on goods from Mexico and non-energy imports from Canada, set a date for 25% tariffs on imported steel and aluminum, and is planning reciprocal tariffs on all countries that tax U.S. imports. Earlier this week he proposed 25% on tariffs on automobile, semiconductors and pharmaceutical imports.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.