Gold Near Rs 1 Lakh per Sovereign - Experts Warn of Continued Rise!!
Gold prices in India have reached unprecedented levels, leaving many wondering whether the value will ever come down. With the cost of making charges included, the price of a sovereign has now touched ₹1 lakh, making gold increasingly unaffordable for the common man.
In the past 10 months, the price of a sovereign has risen by ₹30,000, marking a 40-55% increase over the last year alone. Over the past six months, prices have surged by 35-45%, and in just the last 30 days, they have climbed another 7-12%.
Why are gold prices rising?
Experts attribute this steep rise to two major global factors - international tensions and interest rate cuts by the U.S. Federal Reserve.
Ongoing political instability in France and Japan, as well as conflicts like the Russia-Ukraine war, have prompted investors to seek safe-haven assets such as gold. Additionally, several central banks, including the People’s Bank of China, have been actively purchasing gold, pushing prices even higher.
Technical indicators such as the Relative Strength Index (RSI) suggest there might be a minor correction ahead. However, analysts predict that gold prices will continue to rise in the coming months.
Will gold continue to rise in 2025?
Experts believe that unstable global economies, geopolitical risks, and large-scale purchases by central banks will keep gold prices elevated throughout 2025.
Another key factor is the weakening of the U.S. dollar, which makes gold cheaper for foreign buyers and boosts demand.
The link between the dollar and gold
Gold is priced in U.S. dollars, meaning that when the dollar weakens, gold becomes more affordable internationally. For example, if ₹88.77 equals one dollar today and the value of the dollar drops to ₹70, more buyers will convert rupees to dollars and purchase gold. Increased demand naturally drives up gold prices.
The fall in the dollar’s value is largely due to countries like China selling their dollar reserves, and the U.S. Federal Reserve reducing interest rates. Lower interest rates make traditional investments less attractive, prompting investors to shift towards gold - further fueling its price surge.
Expert outlook
While a minor short-term correction is possible, experts agree that a significant fall in gold prices is unlikely in the near future. With global uncertainty, central bank policies, and investor sentiment all favoring gold, the yellow metal’s rally appears set to continue well into 2025.
