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Gold hits ₹95,000 in India: Should you buy, hold, or sell in H2 of 2025?
According to a mid-year report by the World Gold Council, geopolitical tensions, a weakening US dollar, and interest rate uncertainty were key drivers behind gold hitting 26 new all-time highs (ATHs) this year, with prices averaging $3,067 per ounce in H1 and ending June at $3,287/oz.
H1 2025: What Fueled Gold's 26% Surge?
US Dollar weakness: The greenback had its worst start to the year since 1973.
Interest rates stabilising: Rate cuts now look imminent in the US and EU.
Geopolitical instability: War, trade conflicts, and political volatility drove safe-haven demand.
ETF flows: Global gold ETFs saw net inflows of 397 tonnes, pushing total assets under management to $383 billion.
Central bank buying: Despite not being record-setting, demand remains above pre-2022 averages.
In India, gold prices crossed ₹95,000 per 10 grams, delivering over 26% year-to-date (YTD) returns. Given rising inflation expectations due to tariffs, and gold's historic correlation with uncertainty, retail investors have been reallocating into the yellow metal through Sovereign Gold Bonds (SGBs), ETFs, and even digital gold platforms.
What Could Happen in H2 2025? Scenarios & Strategy
The World Gold Council's Gold Valuation Framework outlines three macroeconomic scenarios for the second half of 2025:
Base Case (Consensus View)
Fed Rate Cut by 50 bps
US GDP growth below trend, CPI at 2.9%
Gold Outlook: Flat to 5% upside
Strategy: Stay invested, avoid aggressive new allocations
Bull Case (Deteriorating Conditions)
Stagflation or recession
Flight to quality + lower yields + dollar underperformance
Gold Outlook: 10%–15% upside, potential to end year up 40%
Strategy: Consider adding gold via SGBs or ETFs if macro stress rises
Bear Case (Risk Resolution)
Geopolitical tensions ease
Economic confidence returns; rates rise again
Gold Outlook: 12%–17% downside
Strategy: Book partial profits, reallocate to equities or debt
Key Data Highlights (as of 30 June 2025)
What Should Indian Retail Investors Do?
If you're already invested:
Stay put; trim only if gold crosses 40% of your asset mix.
Consider locking in partial gains using SGBs, which offer tax-free capital gains on maturity.
If you're looking to enter:
Start small, via ETFs or monthly SIPs in gold mutual funds.
Use dips, especially if gold falls near the $3,000/oz (₹90,000/10g) range.
Avoid overexposure. Even in bullish scenarios, gold should not exceed 10%–15% of your total portfolio.
This is exactly what the World Gold Council has to say:
Gold enters the second half of 2025 coming off an exceptionally strong start to the year – up 26% – shaped by a weaker US dollar, persistent geopolitical risk, robust investor demand and continued central bank purchases.
While some of these drivers are expected to persist, the path forward remains highly dependent on multiple factors including trade tensions, inflation dynamics, and monetary policy.
Consensus expectations suggest a relatively steady finish for gold with moderate upside potential if macro conditions hold. Gold could also be partly supported by contributions from new institutional investors such as Chinese insurance companies.
A more volatile geopolitical and geoeconomic scenario could push gold significantly higher, particularly if more substantial stagflation or recession risks materialise and investor appetite for safe haven assets grows.
On the flip side, while seemingly unlikely given the current environment – widespread and sustained global trade normalisation would bring higher yields and resurgent risk appetite, challenging gold's momentum. Gold could also be tested by a visible deceleration in central bank demand beyond current expectations.
In all, given the intrinsic limitations of forecasting the global economy, we believe that gold – through its fundamentals – remains well-positioned to support tactical and strategic investment decisions in the current macro landscape.
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