STRIKE A BALANCE

GOLD CAN SHIELD YOU DURING STORMS, BUT EQUITIES ARE WHAT POWER THE JOURNEY ONCE THE SKY IS CLEAR

- BY NACHIKET KELKAR

For over 18 months, gold prices have surged on the back of geopolitical tensions and trade-related uncertainties, and the rally shows little sign of cooling. On September 16, gold futures on the MCX with October expiry hit a life high of ₹1,10,574 per 10 gram, while December contracts traded as high as ₹1,11,637. In global markets, prices touched a record $3,697.70 an ounce.

So far, in 2025, 24-carat gold has surged 43 per cent in India, making it the standout asset class. By contrast, the BSE Sensex is up just 5.4 per cent. Looking further back to the start of 2024, gold has risen over 75 per cent, compared with 14 per cent of the Sensex.

Several factors are fuelling the rally. Geopolitical risks from the Russia-Ukraine war and conflict in the Middle East have pushed investors towards safe-haven assets. US tariffs have heightened trade tensions and concerns about global growth. Central banks, wary of uncertainties, have also been building gold reserves at a rapid pace. Expectations that the US Federal Reserve will cut interest rates have added to momentum.

"Geopolitical risks are adding to safe haven demand. Ongoing tariff disputes and political uncertainties between US President Donald Trump and the Federal Reserve are fuelling concerns about the Fed's independence and the broader policy path. These cross currents are keeping investors anchored to gold as a hedge," said Chintan Mehta, CEO, Abans Financial Services.