Gold Prices In 2025: Repo Rates And Wedding Demand To Drive Rates

Gold prices had seen a 21% surge in prices in 2024. This was due to geopolitical tensions like the Israel-Gaza and Russia-Ukraine conflicts. Other cues that impacted the price of the precious metal include Fed rate cuts, record central bank purchases, and India’s import duty reduction that boosted demand. While the safe-haven buying accounted for rates globally, domestic demand was driven by festive demand.

The lowest that the yellow metal's price has gone down to in this period was Rs 61,590, according to the India Bullion Association. The highest level was hit on Oct. 30, when prices hit Rs 82,400 as prices were pushed up due to the festive demand.

Both global and domestic cues impacted commodity prices in 2024. These factors could drive prices, according to experts.

Central banks have been net buyers of gold for nearly 15 years. The commodity prices could go up to $3,000 per troy once, according to Amit Gupta, research analyst at Kedia Advisory. This potential price is attributed to geopolitical risks and inflationary pressures.

Global central banks' “appropriately loose” rate cuts and Trump’s tariff policies may support inflation, benefiting gold as a hedge, according to Gupta. ICRA forecasts 14-18% growth against last year in Indian gold jewellery consumption. He also anticipates that ETF would see more inflows.

The US Fed is expected to undertake only two 25 bps rate cuts in 2025, against the expected four cuts earlier. This is due to the strong US dollar and elevated bond yields that are supported by trade tariffs.

Easing of conflicts in major regions could decrease demand for safe-haven, according to Gupta. World Gold Council predicts slower gold price growth amid stable conditions. He also noted that a rebound in global economic growth could reduce the need for gold.

"Potential policy shifts, such as the new US president's stance on interest rates and trade, could cause drastic movements in gold prices by January 20. While VAR escalation remains a potential factor, it is not currently active," said Darshan Chauhan, director of Sky Gold.

While repo rates and geo-political stances drive global demand, the domestic markets have triggers like festive demand and wedding purchases.

"Domestically, the marriage season in February and March drives significant business to business and retail shopping, followed by the Akshaya Tritiya festival in April and May, which sees substantial purchases," said Chauhan.

The business to business factor comes in because the buying happens from business to business. Chauhan expects that February and March this year would see shopping for the marriage season and then for Akshaya Tithya in April and May. There is one more trend, according to Chauhan, which is the new US President coming in.

"If he gets very bearish on interest rates and on trade wars, then one can expect gold to move drastically. This will only be triggered by Jan. 20," he noted.