AFTER A STELLAR PERFORMANCE IN 2025, WHAT NEXT FOR GOLD?

Gold had a blockbuster year in 2025, delivering returns in the range of 70-75% in rupee terms and setting multiple all-time highs in both international and domestic markets.

- Shri V.P. Nandakumar, Chairman & MD, Manappuram Finance Ltd

The rise in price far outpaced what most analysts had pencilled in a year earlier. As investors look ahead to 2026, the balance of strong safe-haven demand, central-bank buying and a broadly bullish commodities backdrop suggests further gains are likely, albeit at a more moderate pace than in 2025.

2025: A Year That Surprised Everyone

Most analysts entered 2025 expecting a good year for gold, but few anticipated the scale of the rally that eventually unfolded. Forecasts published in late 2024 typically clustered between 2,300 and 2,700 dollars an ounce for 2025, with even bullish scenarios stopping short of the levels ultimately reached.

After all, gold went on to surge past 4,000 dollars an ounce at its October peak, with domestic prices in India approaching ₹1.4 lakh per 10 grams as the year drew to a close.

For Indian investors, this translated into calendar-year returns of roughly 70-75%, making gold one of the best-performing mainstream asset classes of 2025. The magnitude of the move was such that even longtime gold bulls were forced to revise up their targets as the year progressed.

Why the Meteoric Rise

Two structural forces were central to gold’s stellar performance: sustained central-bank accumulation and easy global liquidity conditions, particularly in the United States. A recent analysis of official-sector activity shows that annual central-bank net purchases averaged about 473 tonnes between 2010 and 2021, then jumped to 1,136 tonnes in 2022, 1,051 tonnes in 2023 and 1,045 tonnes in 2024, with 2025 recording 950 tonnes of purchases. This extraordinary appetite reflects a desire among many reserve managers to diversify away from the US dollar at a time of heightened geopolitical risk and concerns about the long-term sustainability of developed-market fiscal positions.