Gold Rally May See Breaks Due To Trump's Tariff Walk-Backs, Says Axis AMC’s Devang Shah

The historic rally in gold over the past year may soon come to an end, with prices expected to slow down in the near term, Devang Shah, head of fixed income at Axis AMC, told NDTV Profit on Tuesday.

Gold touched an all-time high of $3,012.05 per ounce on March 18, amid rising uncertainty over an economic slowdown in the United States and geopolitical tensions. This is the second time in a week that the yellow metal has crossed the $3,000-mark.

Speaking to NDTV Profit, Shah explained that gold’s exceptional rally can also be attributed to central bank purchases across the world, particularly in China.

“China is one of the biggest contributors to central bank buying. The gold rally has been driven by geopolitical risks, currency issues like dollar de-dollarisation, and central bank purchases. However, in the near to medium term, gold prices may see muted returns. Gold remains a strong asset allocation, and we advise clients to hold on due to the significant price run-up. The dollar has depreciated by 6–7% since US President Donald Trump took office, which has supported gold,” he said, adding that the potential dollar spending could stabilise prices of gold.

Commenting on US President Donald Trump's easing of tariff threats, Shah noted that a stabilising dollar and reduced trade tensions could help balance gold prices.

 “I think the US president (Trump) is going slow on tariff implementation. That means we should see some breaks to the rally,” he said.

Factors such as global tensions and trade wars typically position gold as a safe-haven asset, attracting investors during uncertain times, according to Shah.

In 2025, the precious metal has delivered 14% returns so far. Currently trading at nearly Rs 90,000 for 10 grams of 24-carat gold, it was valued at Rs 78,925 on Jan. 1.

To investors, Devang Shah recommended maintaining gold in their investment portfolios as part of asset allocation. “I think probably Gold came out to be a clear winner last year. And somewhere down the line, one-year returns for gold have been upwards of 35%, if I'm not mistaken. So, yes, completely on gold,” he added.

According to Shah, gold’s returns can be cyclical, with periods of strong gains followed by stagnation. He suggested that in the near term, other asset classes, such as fixed income, may offer similar returns.

“If you ask me, I think there are other asset classes which might give you similar returns. We have seen some sell-off in equities. We believe that fixed-income markets at this point in time are very attractive because of RBI measures and expected rate cuts. In the near term, gold might see neutral returns, but in the medium term, you can still have an asset allocation to gold.”