Ahmedabad: Gold has always glittered brightest in times of global turmoil. But bullion traders say the steepest rally in recent decades has unfolded in 2025, triggered by escalating tariff wars, geopolitical flashpoints and a structural shift in global reserve strategies. Domestic prices climbed as much as 75% in this period, contributing to a 74% annual rise.Traditionally viewed as a hedge against economic and political uncertainty, gold has surged during crises ranging from the 2008 financial collapse and the 9/11 terror attacks to the Covid-19 pandemic and even the Great Depression of 1929. However, market participants point out that the 2025 upsurge has been sharper and broader than previous cycles.The rally gathered momentum after the United States announced fresh tariffs in April 2025, initially at 26% and later raised to 50% in July. Following these measures, domestic gold prices rose between 58% and 75% until Friday, Feb 6. Prices climbed from around Rs 91,500 per 10g in early April to approximately Rs 1,01,400 by end-July. Overall, gold prices in 2025 rose by 74%, supported by tariff shocks, geopolitical tensions and central bank buying. In comparison, gold had risen 38% after the first Covid-19 case was reported outside China in Jan 2020. During the 2008 Lehman Brothers collapse, gains stood at 36%. Analysts attribute the current rally to heightened volatility across global financial markets and a growing shift away from dollar-centric assets.Haresh Acharya, director, India Bullion and Jewellers’ Association (IBJA), said the rally reflects more than traditional safe-haven demand. “We are seeing an unusual combination of factors shaping investor behaviour. Along with geopolitical tensions and tariff-driven shocks, there is a broader re-evaluation of confidence in the US dollar as the undisputed global reserve currency. Both central banks and private investors are diversifying reserves into precious metals. While the dollar remains dominant, this recalibration of trust is a key driver behind gold’s strength today,” he said.According to the World Gold Council, gold saw a historic, record-breaking rise, with prices scaling 53 new all-time highs globally and rising over 70% in some markets. “This was driven by intense geopolitical tensions during the year, tariff wars, central bank buying, and safe-haven investments. Unlike past crises, the 2025 rally was driven by a mix of massive ETF inflows, high-volume bar/coin demand, and structural shifts in central bank holdings,” according to the WGC Gold Demand Trends Report.The assets under management (AUM) for Gold ETFs in Gujarat rose 162% from Rs 681.53 crore to Rs 1,792.37 crore. During the same period, pan-India growth in AUM for gold ETFs was 173%, which closed at Rs 1.2 lakh crore in Dec 2025.Jayesh Vithalani, a financial adviser, said, “Globally, the US dollar has weakened against most major currencies, even though it gained against the Indian rupee. That divergence had a ripple effect on investor behaviour. We are seeing a clear shift away from equities into physical gold and gold ETFs, driven by expectations of further price appreciation. Both gold and silver posted a strong rally, which reinforced sentiment around precious metals as safe-haven assets, especially with central banks continuing to accumulate gold. Investment demand remains bullish, though jewellery buying stayed muted as consumers hold back at current price levels.”
