NEW DELHI– Gold’s meteoric rise in 2025 ranks among the sharpest in more than five decades, rivaling the legendary bull runs of 1979–80, 2010–11, and 2020. But unlike those earlier cycles—largely triggered by Western economic crises—this rally is being powered by Asia, driven by central bank diversification and surging official-sector demand, according to a report released Thursday.
The yellow metal has soared more than 50 percent year-to-date, breaking past $4,000 per ounce on COMEX and crossing Rs 1,20,000 per 10 grams in India. The rally has produced over 35 record highs so far this year, underscoring investors’ flight toward tangible assets amid persistent global uncertainty.
Silver has mirrored gold’s momentum, climbing over 60 percent year-to-date across exchanges, according to Motilal Oswal Financial Services. What began as a cautious start to the year has evolved into a full-fledged super cycle, fueled by a broad capital rotation from bonds and riskier assets into safe havens.
The rally has been supported by a weaker dollar index—trading below 100—and a strengthening rupee, both of which have buoyed domestic bullion prices. “Markets are now pricing in a 70 percent probability of U.S. Federal Reserve rate cuts in October and December, amid weaker labor data and rising fiscal concerns,” the report said.
Political shifts in Asia have also contributed to gold’s rise. Japan’s new fiscal-dove prime minister, Sanae Takaichi, has added to global safe-haven sentiment, while China’s push to position itself as a global gold custodian has further reinforced structural demand.
“Gold’s stellar rally reflects a confluence of macro shifts — from fiscal uncertainty and a softer dollar to strategic diversification by central banks. Asia is emerging as the epicenter of this new monetary alignment,” said Manav Modi, Analyst, Commodities and Currencies, Motilal Oswal Financial Services Ltd.
While demand has surged, supply has remained relatively stagnant. Global mine output in 2025 has been constrained by declining ore grades, tighter environmental regulations, and higher operational costs. Recycling activity has risen modestly but remains well below prior bull-market levels.
In contrast, physical demand has been robust across Asia and the Middle East, with China, India, Turkey, and Gulf nations leading the charge as inflation and currency pressures spur record safe-haven buying.
Global gold ETF holdings have surpassed 450 tonnes, marking the strongest inflows since 2020, while central banks have collectively purchased more than 600 tonnes in the first nine months of the year.
India, capitalizing on the rally, imported 300 tonnes of gold and 3,000 tonnes of silver by the third quarter of 2025, the report added. (Source: IANS)
