Rise and shine

Global uncertainties will benefit gold

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Gold has been the best-performing asset in 2025, gaining 28 per cent in dollar terms since January and hitting record levels. Its price has crossed ₹1 lakh per 10 grams in India, though profit booking occurred above the six-figure mark. The price has experienced wild fluctuations over the past month, partly reflecting the flip-flops in United States (US) tariff policy. After spiking to highs after "Liberation Day", the precious metal lost some ground as US President Donald Trump moderated his stance on tariffs. But it has swung up again due to the continued macroeconomic uncertainties and the likelihood of higher global inflation.

As a traditional hedge against inflation and, more broadly, macro uncertainties, the metal tends to be hoarded by households as well as central banks. Indeed, most central banks have increased their gold holding. Although the process started much before tariff-related uncertainties, the unpredictability of the US government has only increased the appeal.