The price of gold has decreased after recently reaching an all-time high of Rs 1 lakh. According to Motilal Oswal Financial Services Limited (MOFSL), it continues to maintain a buy on dips on Gold, wherein investors can start accumulating near the support zone for the long-term targets of Rs 1,06,000.
The gold rate today in India is Rs 95,630, which implies that investors can consider an 11% possible gain. Technically, from a medium to long-term perspective, MOFSL sees support near ₹ 90,000-91,000 while resistance is near Rs 99,000.
The first quarter of 2025, for Gold and Silver was as astounding as the last year. In Q1’25, Gold posted gains of 18%. In the new financial year as well, the rally continued, as gold marked an all-time high of $3500 and was very close to Rs 1,00,000. However, the tide turned quickly, as a sharp sell-off was witnessed moving forward, from record highs.
Also Read: Gold rate doubles in less than 3 years as gold price jumps 100% to Rs 1 lakh
Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services says, “Demand and supply factors historically have not directly made an impact on gold prices, and especially in a scenario where there are more overpowering uncertainties present in the market.
Gold prices have posted a sharp rally over the last couple of months, hence, some cooling off in prices can not be ruled out. There are both positives and negatives for Gold prices at this juncture, mixed economic data points, tariff war, higher inflation expectations, rise in slower growth concerns, rate cut expectations, geo-political tensions, concerns regarding rising debt, increase in demand, and fall in US Yields could act as tailwinds for prices. Any updates regarding easing off in above mentioned uncertainties could put further pressure on bullion.”
Major factors triggering volatility in bullion market
President Tariff threats: Tariff war with China and major nations – both the US and China have levied more than 100% tariffs on each other
Geo-political tensions – War-like scenario in the Middle East, China- Taiwan and elsewhere developing over the years
Fed monetary policy: Market expectations and the Fed’s intent for an interest rate cut
President Trump’s Tariff Threats
In April 2025, gold prices experienced significant fluctuations driven by President Donald Trump’s economic policies. Earlier, Trump administration had targeted 50–60 trading partners to narrow the trade imbalance, sparking a full-blown trade war, especially with China.
Tariffs rose as high as 145% on Chinese goods and 125% on U.S. exports, rattling global markets. Against this backdrop, gold surged to a record $3,500, as investors sought safety amid Trump’s tariff threats and public attacks on Fed Chair Jerome Powell, raising fears over the Fed’s independence.
However, the rally was short-lived, as towards the end of last week in April, gold prices fell by more than 2% from an all-time high, as signs of easing U.S. China trade tensions emerged. As global markets react, gold remains a critical gauge of investor anxiety around trade and monetary policy risks.
The White House hinted at progress in tariff negotiations, and China responded by exempting certain U.S. imports from tariffs, despite downplaying claims of active negotiations. These developments reduced the demand for safe-haven assets like gold, leading to a decline in prices.
However, President Trump’s economic policies, including the imposition of a 10% tariff on all U.S. imports and calls for the Federal Reserve to cut interest rates despite easing inflation, have contributed to market volatility.
Fed policy decisions
Federal Reserve has maintained a cautious and data-dependent stance, keeping the federal funds rate steady at 4.25%–4.5% after a series of cuts in late 2024. Slowing economic growth, now projected at 1.7% for 2025, and persistent inflation pressures above the 2% target are key factors behind the Fed’s decision to pause further rate changes.
Additionally, Fed has announced a significant slowdown in its balance sheet reduction program, lowering the monthly cap on Treasury redemptions from $25 billion to $5 billion to ensure sufficient liquidity.
External risks, including renewed trade tensions under the Trump administration, have added to economic uncertainty, reinforcing the Fed’s patient and flexible approach. Despite political noise, particularly past criticisms from the White House, the Fed’s independence appears intact, with no current threat to Fed Chair’s leadership.
Going forward, markets are pricing in the possibility of rate cuts later this year, but the Fed has made clear that any adjustments will be contingent on incoming economic data, especially inflation and employment dynamics.
Supply – Demand story
Central Bank continued to be a net buyer of Gold even in 2025, however, the buying has slowed amidst elevated gold prices. Amidst many positives, there are some factors that are putting a cap on the gains.
Demand destruction in physical demand is a concern with gold prices surging to record highs and the domestic physical market trading at a discount over the last few months.
The discount in Indian gold went till $60 and then briefly recovered from there towards $27, where it is currently hovering. Higher discounts indicate weakened demand; hence, sustained lower demand in the physical market could weigh on overall sentiment.
Akshaya Tritiya comparison
Comparing gold returns over the last 15 years for Akshaya Tritiya, gold has delivered a 10% CAGR. There have been instances of some price correction, but overall rise in prices has been consistent and steady. There are several platforms for market participants to invest in gold based on their risk profile. Investment can be in the form of ETF, which is now a very popular way of investment, exchange traded derivatives, Digital Gold and Physical bars and coins.