THE GOLD RUSH

IS THE BET ON THE YELLOW METAL A HEDGE AGAINST CHAOS OR A WARNING SIGN OF THE TIMES TO COME?

- NAVNEET DUBEY

GOLD IS ON A ROLL like Forrest Gump, running upwards for the last three years. Forrest Gump ran for three years, two months, and something. Where is this gold rally headed, and how long will it continue? No matter. Gold, that symbol of wealth and ancient hedge against uncertainty, is glittering brighter than ever. And as in 1986, the current gold rush is as much about psychology and fear as it is about economic fundamentals.

The comparison is not accidental. The gold rally of 1986 has striking similarities with what is happening in 2025. The new factors: aggressive central banks, digital disruption, and a changing investment class.

Manav Modi, senior analyst for commodity research at Motilal Oswal Financial Services, cites global uncertainty, shifting monetary policies, and safe-haven buying for the gold rush in 1986 and today.

“In both cases, geopolitical tensions played a central role: the 1986 rally was fuelled by Cold War anxieties and instability in the Middle East, while the 2025 surge reflects rising global conflict—from the Russia-Ukraine war to U.S.-China tensions and unrest in the Middle East,” says Modi.

“In both periods, gold served as a hedge against global risk and currency volatility. The weakening of the U.S. dollar was also a common driver. In 1986, the U.S. devalued the dollar after the 1985 Plaza Accord; similarly, in 2025, concerns about U.S. fiscal deficits, debt sustainability, and de-dollarisation are undermining confidence in the greenback,” says Modi.

In both years, uncertainty around interest rate policy and inflation fears made gold a haven. Shifts in central bank strategy—then and now—helped fuel demand for hard assets. However, the differences lie in the scale and structure of the rallies. In 1986, gold rebounded from a major fall, while in 2025, gold rallied within a long-term uptrend and was increasingly seen as a strategic reserve.