Gold prices continue their record-breaking surge, fueled by central bank purchases, inflation fears, and geopolitical tensions. Analysts predict the rally to touch $3,000 per ounce soon.
February 11, 2025: The gold market is on an unprecedented rally in 2025, setting 11 record highs in under two months. The latest peak saw gold prices surge to $2,906 per ounce, with analysts forecasting a potential climb to $3,000 per ounce.
In India, domestic gold prices crossed ₹85,880 per 10 grams, marking a 11.7% rise this year alone. The metal’s safe-haven appeal has intensified amid global economic uncertainty, rising inflation, and trade tensions.
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Key Drivers of Gold’s Surge
1. Central Bank Buying & De-Dollarization
- China, India, and Poland are among the leading central banks hoarding gold, reducing reliance on the US dollar.
- China has cut US Treasury holdings, opting for gold reserves instead.
2. Geopolitical Tensions & Trade Wars
- Conflicts in Russia-Ukraine and the Middle East have fueled global instability, boosting gold’s demand.
- Rising US-China tensions over tariffs and trade policies have further driven investors toward gold.
3. Trump’s Policies & Market Fears
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- Donald Trump’s election victory has stoked inflation fears due to his expansionary policies.
- Plans for corporate tax cuts, higher tariffs, and trade restrictions have triggered a shift toward gold investments.
Gold Market Trends: Demand & Supply Dynamics
- New York traders have imported 393 metric tonnes of gold due to fears of US tariffs, leading to a four-week delay in withdrawals from the Bank of England.
- India’s gold reserves have jumped 73 tonnes, with the Reserve Bank of India (RBI) increasing gold’s share in forex reserves to 11.35%.
- The World Gold Council (WGC) reported that global central bank gold purchases exceeded 1,000 tonnes for the third consecutive year.
Analysts Raise Gold Price Targets to $3,000
Leading financial institutions have revised their gold price forecasts upward:
- UBS raised its 12-month gold target to $3,000 per ounce, citing demand as a safe-haven asset.
- Citi predicts gold to average $2,900 in 2025, up from previous estimates.
- Goldman Sachs has also set a $3,000 per ounce forecast for the year.
Indian Gold Market & Jewellery Demand
Despite record-high gold prices, Indian jewellery demand remains strong:
- In Q3 2024, gold purchases peaked following a cut in import duties.
- India’s full-year gold demand stood at 563 tonnes, slightly lower than 2023 levels but still significant.
- Investment in gold ETFs and bullion has seen a steady rise, indicating continued faith in gold as a long-term asset.
Conclusion: What’s Next for Gold?
Gold’s strong rally is expected to continue, with global economic uncertainty and geopolitical risks keeping the safe-haven demand high. Experts believe that unless global tensions ease and inflation stabilizes, gold prices could climb beyond $3,000 per ounce in the coming months.
Tags:
Gold Price, Gold Market, Gold Rally, Precious Metals, Central Bank Reserves, Inflation, Geopolitics, US-China Trade War, Federal Reserve, Indian Economy