Gold's Golden Rise
Gold is on a significant upward trajectory, potentially reaching $4,500 per ounce in international markets, as indicated by a report from Motilal Oswal
Financial Services Ltd (MOFSL). This rally is primarily supported by consistent central bank purchases, persistent geopolitical tensions, and robust demand from Asia. In 2025 alone, gold has risen over 50 percent, surpassing the $4,000 per ounce mark and setting over 35 record highs throughout the year. The price increase is largely attributed to global uncertainties, anticipated US Federal Reserve rate cuts, and continuous accumulation by central banks. According to Manav Modi, Analyst, Commodities & Currencies at MOFSL, gold's impressive rally stems from various macroeconomic shifts, including fiscal uncertainties, a weaker dollar, and strategic diversification by central banks. Asia is evolving into the central point of this new monetary alignment. In India, gold recently peaked at Rs 1.20 lakh per 10 grams and could potentially climb to Rs 1.35 lakh in the long run, assuming a USD-INR exchange rate of 89. The strong rupee, in comparison to a weaker US dollar index, further supports the rally.
Silver's Shining Ascent
Silver has outperformed gold in 2025, showing a year-to-date gain of over 60 percent. It is anticipated to reach approximately $75 per ounce, driven by substantial industrial demand and an ongoing supply deficit. Domestic silver prices are projected to increase to Rs 2.3 lakh per kilogram. The rise of this metal is fueled by its diverse applications in solar energy, electric vehicles, and AI hardware. Navneet Damani, Head of Research, Commodities & Currencies at MOFSL, mentioned that central bank diversification is reshaping the bullion market. Institutional demand and sovereign accumulation are now in alignment with long-term value creation. Ongoing US fiscal concerns and softening labor data have amplified the demand for safe-haven assets. Concurrently, supply constraints such as stagnant global mine output, declining ore grades, and stricter environmental regulations have limited availability.
India's Demand Story
India, one of the largest consumers globally, imported around 300 tonnes of gold and 3,000 tonnes of silver by September 2025, which reflects consistent demand. The gold-silver ratio has narrowed to 81-82 from 110 earlier in the year, highlighting silver’s relative strength. MOFSL anticipates strong gold demand in India during the upcoming Diwali festival, supported by cultural preferences and rising disposable incomes. Historically, domestic gold prices have increased in seven out of the past ten Diwali seasons. Despite possible short-term corrections, MOFSL maintains a positive long-term outlook for both metals. (Disclaimer: Recommendations and views on asset classes given by experts are their own. These opinions do not represent the views of The Times of India).
