
Gold's next big move? InCred Equities forecasts $5,000 target on central banks' buying spree
Central banks worldwide are increasingly viewing gold as an alternative reserve to the US dollar, especially as the dollar is being used more frequently as a geopolitical tool, most notably through sanctions, asset freezes, and trade restrictions, which has accelerated the search for alternatives, and gold has emerged as a suitable option.
The world's dependence on the US dollar has been a cornerstone of the global financial system for nearly eight decades. However, domestic brokerage firm InCred Equities said that 'cracks in the foundation are widening and the process of de-dollarisation is no longer speculative.'
According to the brokerage, countries like China, Russia, and Iran have clear strategic reasons to reduce their dollar exposure. Even allies now quietly acknowledge the need to hedge against future US policy shifts.
'As global trade flows become more diversified, the reliance on a single currency is increasingly seen as inefficient and risky. Cross-border trade in yuan, dirhams, roubles, and rupees is growing—not yet at scale, but fast enough to signal a change,' InCred added.
The brokerage also noted that 'central banks are buying gold at record levels' and pointed to bilateral agreements such as 'India-UAE, China-Brazil, and Russia-Iran' experimenting with local currency settlements.
'Nevertheless, the US dollar remains the king in FX markets and global reserves. But empires don't fall in a day. The British pound lost its crown slowly, over decades. The same path could await the dollar,' the note said.
'The erosion is gradual—until it's not. Whether it takes 10 years or 30, the direction is clear. The US fiscal position is deteriorating, and its politics are increasingly unstable. As confidence wanes, the world is ready with its plan B—i.e., islands of currency swaps and gold,' the brokerage underscored.
According to the World Gold Council, central banks have accumulated over 1,000 tonnes of gold in each of the last three years, a significant increase from the 400–500-tonne average over the preceding decade.
This surge in demand has contributed to a sharp rise in prices, with spot gold climbing from $1,828 to $2,624 over the past three calendar years. So far this year, it has even touched $3,500. Notably, gold gained $1,000 in just eight months, signaling sustained demand not only from central banks but also from other market participants.
In addition, the recent survey conducted by the WGC showed that central banks are expecting a further expansion in gold reserves amid geopolitical and economic instability. Over 95% of reserve managers anticipate that central banks will continue to boost their gold holdings in the next 12 months, according to WCG.
This is 17% higher than the findings of 2024. The survey also found that 43% of central banks are planning to increase their gold holdings within the next year. Interestingly, none of the WGC respondents anticipate a decline in their gold reserves.
In recent years, several pivotal events have positioned gold as the preferred reserve asset for central banks. According to InCred, the first was the freezing of Russia's USD assets by the EU and the US, which exposed the vulnerability of fiat currency reserves.
Secondly, the brokerage pointed to the decline of the yuan as a viable alternative reserve currency, owing to China's increasingly unpredictable policy environment.
Most importantly, it cited US President-elect Donald Trump's warning that any move away from the dollar would be viewed as an attack on the currency. Trump cautioned that countries pursuing de-dollarization could face a 100% import tariff from the US.
Meanwhile, traditional demand for gold remains strong, adding further fuel to its rally. 'Don't be surprised if gold touches US$5,000 per ounce in the near future,' the brokerage said.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


NDTV
19 minutes ago
- NDTV
"Need To Relook At Our History": Economist As PM Offers Prayers At Iconic Cholapuram Temple
New Delhi: Prime Minister Narendra Modi's visit to the Gangaikonda Cholapuram Shiva temple, has put the spotlight on the Chola empire, especially on the time of Rajendra Chola, who stood tall when northern India was under Muslim rule. This, however, was not an area or a period that gets much attention -- the study of history being "Delhi-centric", said economist and historian Sanjeev Sanyal, pointing to the big takeaway from the Prime Minister's visit. "We need to begin to relook at our history and think about our great ancestors as a vigorous people," said Mr Sanyal, explaining that the popular conception of Indians as a passive people who are thankful to invaders -- from Muslim to British -- for bringing in technology, culture and cuisine. Our ancestors, he said, "built great temples, they built entire new cities when necessary". "This is a much more vigorous view of ourselves than, you know, we are waiting for somebody to conquer us and give us the railways," said Mr Sanyal, who is also the Principal Economic Advisor to the government. "These were vigorous, risk-taking people, happy to go to war with each other sometimes or with foreign invaders. But the point is, this were not a passive people. And instead, the only person in our history of our, you know, pre-Islamic history that we celebrate is Ashoka. And the only reason we celebrate him is because he was passive, because the empire collapsed under him," he added. He said he was "glad the Cholas are being celebrated," but they were not the only people who had left their mark on the history of southeast Asia. "Even Tamil Nadu itself has many others. The Pandyas, the Cheras, which are from next door in Kerala, the Pallavas, and then the Gajapatis and all the kings of Kalinga, who also had these great maritime linkages to Southeast Asia. The western coast of India has amazing history of links with the Roman Empire and so on," he said. Even in the north, there was more than what gets most attention. "Whether you have the Ahoms of Assam or the Pal dynasty and the Sen-s of Bengal or the Kadambas of Goa or the Chalukyas of Maharashtra and the Rashtrakutas, we all have amazing histories for every part of the country. But somehow we are obsessed with this Delhi-centric view that, you know, we should all be grateful to the Mughals for biryani," he added. The Cholapuram temple, a UNESCO World Heritage site built around 1030 by Rajendra Chola, stands as evidence of the affluence of the of the empire under him. It was built around two decades after the Tanjore temple and in the same style. The Prime Minister's visit comes ahead of next year's assembly election in Tamil Nadu, where the BJP is trying hard to carve out a niche.
&w=3840&q=100)

Business Standard
19 minutes ago
- Business Standard
India-UK FTA: Tariff cuts likely to weigh on Customs duty collections
For FY26, the Centre has budgeted Customs revenues to grow only 2.1 per cent to ₹2.4 trillion premium Asit Ranjan Mishra New Delhi Listen to This Article The India-UK free-trade agreement (FTA), under which New Delhi has agreed to reduce the weighted average tariff from 15 per cent to 3 per cent over a period of 10 years, may adversely affect Customs duty collections. However, economists believe the overall revenue impact could still be positive, driven by higher exports and increased economic activity. According to Global Trade Research Initiative (GTRI) calculations, India's revenue forgone in the first year of the agreement is estimated at ₹4,060 crore. 'By the 10th year, as tariff elimination phases in more broadly, the annual loss is projected to rise to ₹6,345 crore,


News18
29 minutes ago
- News18
US, EU reach an across the board agreement on tariffs
Edinburgh(UK), Jul 27(AP) The United States and the European Union reached a tariff deal Sunday after a brief meeting between President Donald Trump and European Commission chief Ursula von der Leyen. A White House deadline was days away for imposing punishing import taxes on the 27-member EU, which is America's leading global trading partner. 'It was a very interesting negotiation. I think it's going to be great for both parties," Trump said. The make-or-break talks were meant to head off trade penalties — and promised retaliation from Europe — that could have sent shock waves through economies around the globe. Trump and von der Leyen held private talks at one of Trump's golf courses in Scotland, then emerged a short time later saying they had reached an 'across the board" agreement. In remarks before the session, Trump pledged to change what he characterised as 'a very one-sided transaction, very unfair to the United States." 'I think the main sticking point is fairness," he said while also noting, 'We've had a hard time with trade with Europe, a very hard time." Von der Leyen had said the US and EU combined have the world's largest trade volume, encompassing hundreds of millions of people and trillions of dollars. Trump said the stakes involved meant of making a deal, 'We should give it a shot." Von der Leyen said Trump was 'known as a tough negotiator and dealmaker" which caused the president to interject with "but fair." She said that, if they are successful, 'I think it would be the biggest deal each of us has ever struck." For months, Trump has threatened most of the world with large tariffs in hopes of shrinking major US trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to 'buy down" the currently scheduled tariff rate of 30 per cent. The Republican president pointed to a recent US agreement with Japan that set tariff rates for many goods at 15 per cent and suggested the EU could agree to something similar. Asked if he would be willing to accept tariff rates lower than that, Trump said 'no." As for the threat of retaliation from the Europeans, he said: 'They'll do what they have to do." Their meeting came after Trump played golfed for the second straight day at his Turnberry course, this time with a group that included sons Eric and Donald Jr The president's five-day visit to Scotland is built around golf and promoting properties bearing his name. A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday. Other voices could be heard cheering and chanting 'Trump! Trump!" as he played nearby. On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course. Joining von der Leyen were Maros Sefcovic, the EU's chief trade negotiator; Björn Seibert, the head of von der Leyen's Cabinet; Sabine Weyand, the commission's directorate-general for trade, and Tomas Baert, head of the trade and agriculture at the EU's delegation to the US. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but was now firm, the administration insisted. 'No extensions, no more grace periods. August 1, the tariffs are set, they'll go into place, Customs will start collecting the money and off we go," US Commerce Secretary Howard Lutnick told 'Fox News Sunday." He added, however, that even after that 'people can still talk to President Trump. I mean, he's always willing to listen." Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes. If Trump eventually made good on his threat of tariffs against Europe, it could meant that everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals would be more expensive in the United States. The US and Britain, meanwhile, announced a trade framework in May and a larger agreement last month during the Group of Seven meeting in Canada. Trump says that deal is concluded and that he and Starmer will discuss other matters — though the White House has suggested it still needs some polishing. (AP) RD RD view comments First Published: July 27, 2025, 23:45 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.