Gold prices are surging: Will the rally for the yellow metal continue or is a dip coming?

Gold prices have been steadily rising, recently crossing ₹85,000 on 5 February 2025, sparking intense speculation about their next move. Investors and traders are closely watching market trends, inflation data, and global economic shifts to gauge future price movements. Analysts weigh in on whether gold will continue its upward momentum or face a correction.

Riya Singh, Commodities and Currency Analyst at Emkay Global Financial Services, says, "Gold prices have reached unprecedented highs as the ongoing US-China trade war and Trump's recent tariffs on Canadian, Mexican, and Chinese imports fuel market uncertainty. This geopolitical turbulence has spurred markets to seek refuge in gold, bolstering its safe-haven appeal. Meanwhile, COMEX gold inventories have surged from 17.547 million to 33.247 million troy ounces, indicating increased stockpiling ahead of potential further trade disruptions. With central banks in China, India, and Russia ramping up gold reserves, the outlook remains bullish. Given ongoing trade conflicts and rising stockpiles reflecting cautious sentiment, gold prices are expected to remain supported, targeting $2,910–$2,925 in the near term."

Experts attribute the surge in gold prices to a combination of factors, including persistent inflation, geopolitical tensions, and central bank purchases. With global economies facing uncertainties and interest rate decisions looming, investors are turning to gold as a safe-haven asset. Additionally, a weaker rupee and high domestic demand are further pushing prices upward.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), said, "Beijing has levied a 10% tax on American oil and farm equipment and a 15% duty on less than $5 billion worth of US energy imports, including coal and LNG. Additionally, it will look into Google's possible antitrust infractions. According to a notification released by US Customs and Border Protection on Wednesday, Hong Kong and mainland China will be subject to an additional 10% US duty. Gold has given a breakout above $2,850. We may see strength towards the psychological level of $3,000 (~₹86,000)."

However, some analysts caution that a short-term correction is possible if central banks signal aggressive rate hikes or if economic conditions stabilize. Profit-booking by investors could also lead to temporary dips. Despite this, long-term trends suggest that gold remains a strong hedge against inflation and economic volatility, keeping its appeal intact.

Adhil Shetty, CEO of BankBazaar.com, said, "Economic volatility and uncertainty help gold. Persisting inflation, instability in the stock markets, and Trump's trade wars are going to keep gold interesting in the weeks to come. The customs duty cut announced in the latest budget will also help."