Gold above ₹1 lakh is the ‘new normal’: Augmont’s Renisha Chainani

Gold price above the ₹1-lakh-mark is emerging as the “new normal,” says Renisha Chainani, head of research at gold trading platform, Augmont. While she does not rule out a near-term downside in the ₹95,000-98,000 per 10-gram range, a return to the pre-Covid levels of ₹80,000-90,000 is highly unlikely, she feels.

Chainani expects a correction of 6-7% by the year-end, calling it a healthy retracement in a sustained bull market. “I’m expecting a small correction first, and then again, if uncertainty persists, we could see another high next year,” she notes.

Gold prices have surged to all-time highs of ₹109,475 per 10g in India, while globally they have risen above $3,645 per ounce, up 40% year-to-date as of September 10, 2025.

According to her, the ongoing rally in gold has been supported by four key factors: central bank demand, geopolitical uncertainty, monetary policy easing, and safe-haven buying.

Chainani highlights that global central banks, including the Reserve Bank of India (RBI), have become consistent buyers of gold, adding nearly 1,000 tonnes annually over the past three years. Gold’s share in the central bank reserves has risen from 5-6% earlier to nearly 18-19%, while allocations to the dollar reserves and treasuries have fallen.

Additionally, geopolitical uncertainty following shifting trade policies, including tariff volatility under U.S. President Donald Trump, has also kept investors seeking safe-haven assets. Besides, the RBI and other central banks are in a rate-cutting cycle, which traditionally boosts demand for gold.

Chainani adds that investors have been consistently accumulating gold during corrections, underlining confidence in the metal’s long-term trajectory. “Gold prices in India began the year at around ₹78,000 per 10 grams and have since seen a sharp rally. This marks one of the strongest upswings in the past five years,” Chainani highlighted, adding that while a temporary correction may play out, the broader demand story remains intact.

Investor behaviour is also changing, she says, with allocations to gold in household and institutional portfolios rising from the earlier 5-10% to around 15-20%.

Notably, gold has delivered a compound annual growth rate (CAGR) of nearly 13% over the past 20 years, comparable to equities at around 15%, making it a credible long-term wealth preserver, she adds.

Looking ahead, Chainani sees long-term potential for international gold prices to climb to $4,000-$5,000 per ounce, driven by sustained central bank demand, monetary easing, and its role as an inflation hedge. “Gold has consistently outperformed inflation for the past 50 years and continues to act as a hedge against uncertain times, volatile currencies, and inflationary pressures. I advise investors to maintain at least 15-20% of their portfolio in gold, split between ETFs or digital gold and physical holdings such as coins, bars, or jewellery,” she says.

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