DIGGING THE DYNAMICS OF GOLD PRICES

Fixing a price for the yellow metal is not a no-brainer; multiple factors in the global arena play a vital role in arriving at the value of gold

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Gold is always considered a haven and a good asset class for hedging. Financial experts suggest investing in it when in doubt or fear — be it of market crashes, volatility, recession, inflation, or hyperinflation. For this reason, not just individuals, even institutional players and countries at large invest in gold.

As per the World Gold Council (WGC) Q4 2025 data, India's gold reserves are at 876.18 metric tonnes, and the Reserve Bank of India (RBI) was the second-highest central bank, after Poland, to purchase gold. India added 72.6 tonnes of gold to its kitty in 2024, raising its gold reserves bar by 9%, thereby putting India in the top 10 countries with the largest gold reserves.

Gold prices cool from record high, but is the rally just getting started?

The price of the yellow metal surpassed $3,500-an ounce and was an all-time high on April 22, 2025, owing to geopolitical tensions triggered by U.S. President Donald Trump's tariff hikes. This is not a one-off moment when gold prices have reacted to the twists and turns in the global geopolitical landscape. History is replete with instances of gold buying frenzies despite the sticker shock. As per the WGC, around 2,16,265 tonnes of gold have been mined throughout history. So why this gold rush, and what determines gold's price?

Is gold an investment vehicle?