Why gold price rally trumped Bitcoins in 2025? EXPLAINED

The demand for gold as a safe-haven asset is increasing amidst significant uncertainty regarding US trade policy, largely due to the aggressive reciprocal tariffs implemented by the Trump administration. Spot gold reached an unprecedented USD 2,943 per ounce, while Comex gold stands at USD 2968 per ounce.

Over the past month, gold prices have risen by approximately USD 300 or 12 percent cumulatively, with several new highs being recorded, according to reports. Gold is trending toward $3,000 per ounce and is expected to surpass $3,080.

This recent strength is attributed to a combination of factors, including increased demand for safe havens driven by higher tariffs, geopolitical tensions, inflation worries, central bank strategies, and continued robust interest from both central banks and retail investors. This trend persists even with rising bond yields and a strong dollar, alongside US data that suggests a robust economy, as noted in a report by Ventura Securities.

In the domestic market, gold prices set a new record at ₹2,954.60 per 10 grams—an increase of 12% in 2025.

Bitcoins drop

Experts suggest that there is currently a “risk off” sentiment in the market, indicating that investors are focusing on capital preservation rather than pursuing potentially high returns.

This has led them to sell risky assets such as stocks and invest in safer alternatives like gold or government bonds, often driven by feelings of economic uncertainty, geopolitical tensions, or negative news, resulting in a cautious market attitude where high-risk investments are being avoided.

In contrast, Bitcoin remains highly speculative. According to information shared by CoinMarketCap, Bitcoin has increased by 4.04% year-to-date (YTD). Since Donald Trump’s inauguration, the price movements of Bitcoin have experienced heightened volatility, particularly following the post-election rally.

While Bitcoin has occasionally surpassed the significant resistance level of $100,000, the absence of clear regulations and retail panic sales prompted by market uncertainty have played a role in driving down prices, as noted in reports.

Gold Outlook

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that this year we have been recommending a multi-asset approach for investors, with Gold being a key element, since we believe equity returns will be modest. Our outlook on gold is positive, especially following the use of the dollar as a geopolitical tool by the US, illustrated when they froze all Russian foreign exchange reserves in dollars after the attack on Ukraine, which exemplifies the weaponisation of the dollar. Consequently, central banks began increasing their gold holdings, including central banks in emerging markets like India and others.

Gold has demonstrated resilience and has outperformed equities; however, this does not suggest that equities will lag indefinitely. We experienced a significant bull run from the COVID low of 7511 in March 2020, reaching 26,277 in the Nifty 50. That period resulted in a 25% CAGR over more than four years. While that exuberant bull market has come to an end for the time being, we anticipate that by the second quarter of the next financial year, GDP growth and corporate earnings will improve, stimulating renewed interest in equities, which should perform well again. Nevertheless, gold should remain a vital component of every investment portfolio.

Technical Views

“We advise short-term gold traders and investors take a cautious approach at this level and consider gradually booking profits. While gold may surge past $3,000 in the international market and ₹88,000 domestically, but whether they can hold at these levels is remains a critical concern,” said Rahul Kalantri, VP, Mehta Equities Ltd.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.