Gold’s glitter hasn’t dimmed. In fact, the metal is shining brighter than ever in a world rattled by trade tensions. The yellow metal hit a fresh high of $3,245.52 per ounce globally last week, while in the domestic market, gold futures marked a record ₹93,940 per 10 grams.
Although gold briefly dipped earlier this month following the US administration’s tariff announcements, the fall was largely attributed to panic selling across assets and profit-booking by investors. The rebound since has been swift and strong, suggesting that gold’s long-term bull run is far from over.
While gold and equity markets across the globe have been rallying in the recent years, since 2025 there has been a considerable selling pressure in stock markets.
However, the bull run in the yellow metal continues. So, what is pushing the price of the precious metals higher?
Haven appeal
In general, a rising bond yield is not good for gold. Because although gold and bonds are seen as safe haven assets, the interest income from the latter would mean higher investor preference. But even though there was a rise in US Treasury yields last week, gold continued to post gains.
Reasons for the increase in yield include inflationary nature of tariffs, liquidation of basis trade in bond market and potentially reduced interest from foreign governments due to trade uncertainties.
Therefore, the argument that when things are bad for equities people buy bonds is just not working. All these uncertainties mean gold, seen as a hedge for inflation and a safe haven, has only made its case stronger, attracting institutional and retail interest.
A key driver in gold’s surge is aggressive central bank buying. According to the World Gold Council (WGC), central banks’ net purchases stood at 42 tonnes in the first two months of 2025. Note that their net buying stood at over 1,000 tonnes in each of the last three years.
“Central banks across the globe have been rebalancing their reserves mix by reducing exposure to US Treasuries and increasing allocation to gold,” says Renisha Chainani, Head of Research at Augmont. “Not just central banks, but investors, too, have been increasing their exposure to gold as seen from gold ETF inflows”.
WGC data show that global gold ETF inflows reached 227 tonnes in Q1 2025, the highest quarterly figure in the past three years, denoting that the investor sentiment remains upbeat.
Weak $ lifts gold
Another big boost has come from the fall in the dollar. Since gold, or for that matter any commodity, is priced in dollar in the international market, a decline in the dollar can lift their prices. The Dollar Index has fallen 8 per cent year-to-date, helping gold to fly high.
Now, with the yield pressure mounting and political uncertainties surrounding dollar-denominated assets, gold appears increasingly attractive.
Trend ahead
Experts believe gold’s bull run is far from over.
“We anticipate continued upward pressure on gold prices in the long term, supported by a weaker dollar, declining US Treasury yields, and heightened geopolitical tensions. Central banks’ ongoing gold accumulation further reinforces this bullish outlook,” says Ramesh Varakhedkar, Head-Commodities,ICICI Securities.
Renisha Chainani adds, “We are likely to see $3,300 per ounce internationally before the year ends.”