Gold rates jumped over 50 per cent in 2025 during the festive season, surpassing Rs 1,32,000 for 10 grams, driven by strong consumer demand ahead of Diwali
and investor interest in safe-haven assets amid trade tension. The surge highlighted gold’s continued significance in Indian culture and its role as a hedge during economic uncertainty. However, prices slipped soon after Diwali as the dollar strengthened its position. Analysts expect that the gold prices may shift their momentum again amid renewed trade negotiations between the US and India, and ongoing US–China discussions. US-China Trade Deal To Influence Yellow Metal Prices Ross Maxwell, Global Strategy Lead at VT Markets, noted, "Investors are closely watching whether renewed trade negotiations between the US and India, and ongoing US–China discussions, can shift the metal’s momentum again. The outlook will depend on the results and impacts from geopolitical uncertainty, central bank policy, and currency movements." Puneet Singhania, Director at Master Trust Group, said, "The meeting between President Trump and President Xi Jinping has increased chances of a successful US–China trade deal and further the potential India–UK trade pact which is expected by the end of the year could inject a dose of optimism into global markets, tilting global investors focus towards equities. Such a shift may trigger short-term volatility and a near term correction in gold after the prolonged rally." Impact Of Extended Trade Tension "Any extended trade tensions or inconclusive deals could boost gold as investors seek safety amid the uncertainty. With the FED maintaining a cautious stance and the possibility of further rate cuts if economic data weakens, the opportunity cost of holding gold falls, while a softer USD would support higher prices. If investors feel that any trade agreements fail to resolve underlying issues, then this could increase demand for gold as a hedge against instability," Maxwell said. However, Maxwell warns that a decisive breakthrough in trade talks, especially if the US comes to credible agreements with China and India, could ease risk aversion, which in turn strengthens the USD, and would reduce gold’s appeal. Analysts also warn that gold may be overbought in the short term, suggesting limited upside without fresh catalysts. Economic Uncertainty "The potential for gold to move past $1,409.96 depends on how trade diplomacy unfolds and how the FED responds to shifting economic signals. If negotiations falter or global uncertainty deepens, gold could break higher. But if progress on trade and policy stability continues, prices are likely to remain range-bound below the resistance at that level. The next few weeks of trade and policy developments will be pivotal for gold’s direction," Maxwell opined. "However, the longer-term outlook for the metal remains constructive, Singhania noted. "Central banks which have turned to be the largest source of demand, continue to accumulate gold as part of their reserve diversification amid gradual move away from heavy reliance on the US dollar. This sustained buying outlays a structural shift in global asset allocation trends, maintaining gold’s relevance as a store of value as well as a positive outlook for price appreciation in a longer horizon," Singhania added.
