Gold prices jump 32% in FY25; can they hit ₹1 lakh mark in FY26? | Stock Market News

Financial year 2024-2025 was a golden year for gold. As per MCX data, Indian spot gold prices surged 32 per cent in FY25, significantly outperforming the equity benchmark Nifty 50 which gained a little over 5 per cent.

On March 28 last year, gold prices were near ₹67,000 per 10-gram mark, which has surged to near ₹88,700 level. In the derivatives segment, MCX Gold on March 28 settled 0.05 per cent up at ₹88,850 per 10 grams.

International gold prices are also at record highs due to increased safe-haven demand and concerns over the global trade war triggered by US President Donald Trump’s aggressive tariff policies.

What drove gold prices in FY25?

Several factors acted together to propel gold prices to record-high levels over the last year.

Expectations of rate cuts by the US Federal Reserve, strong buying by central banks, fluctuating macroeconomic indicators and geopolitical uncertainties have been the main drivers of gold prices for the last one year.

Trump’s tariff policies have raised fears that the world is heading to a major trade war, driving up inflation and puncturing global growth momentum.

All these have boosted gold’s demand as the yellow metal is considered a hedge against inflation and uncertainty.

“Gold prices in FY25 surged due to multiple factors, including geopolitical tensions, central bank purchases, and monetary policy shifts. Escalating conflicts and trade uncertainties, particularly Trump’s tariff policies, drove safe-haven demand,” Renisha Chainani, the head of research at Augmont, observed.

Chainani underscored that central bank buying, led by China and other emerging markets, further tightened supply. Expectations of US Federal Reserve rate cuts weakened the dollar, making gold more attractive. Persistent inflation concerns and fears of economic slowdown also fueled demand.

Volatility in the stock market and commodities due to geopolitical factors and Trump’s tariffs also pushed investors toward gold as a hedge.

Can gold prices hit ₹1 lakh mark in FY26?

The key positive factors in terms of global uncertainty and central bank buying still persist for gold prices, raising speculations that domestic gold prices may jump to touch the coveted ₹1 lakh per 10 grams mark in the new financial year 2025-2026 (FY26).

“Gold’s outlook for FY26 remains bullish, driven by geopolitical uncertainty, central bank buying, and potential US Federal Reserve rate cuts. Central banks, particularly in emerging markets, are expected to continue stockpiling gold, supporting prices. If interest rates decline, a weaker dollar could further boost gold demand to touch $3,200,” said Chainani.

Besides, inflation concerns and economic slowdown risks may continue driving investors toward gold as a safe-haven asset.

However, most of these positives are fairly discounted in the current gold prices, and the yellow metal would need fresh triggers to touch the ₹1,00,000 mark.

Gold prices may consolidate at higher levels without fresh triggers due to demand fatigue and profit booking.

Besides, a rebound in the stock market and the dollar could significantly challenge gold prices.

Experts say the yellow metal could reach that level if there is a deeper trade war, fresh escalations in tensions in the Middle East or Russia-Ukraine front, and macroeconomic indicators show signs of stagflation in the US.

According to Chainani, current forecasts and market conditions suggest domestic gold prices in India could reach approximately ₹95,000 per 10 grams by the end of FY26.

This projection is influenced by several factors, including global economic uncertainties, inflationary pressures, and central bank policies, which continue to drive demand for gold as a safe-haven asset.

“While these factors support a bullish trend, reaching the ₹1,00,000 per 10 grams mark would require additional catalysts, such as significant currency depreciation or heightened geopolitical tensions. While a substantial increase in gold prices is anticipated, surpassing ₹1,00,000 per 10 grams in FY26 appears less likely under current projections,” said Chainani.

While gold prices could see short-term corrections, the long-term fundamentals suggest the yellow metal will continue attracting investors’ interest in FY26.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.