Gold soars 60% since March 2024 to cross Rs 95,000: Should you invest?

Gold prices have reached unprecedented heights, with MCX Gold surpassing Rs 95,000 per 10 grams, driven by escalating U.S.-China trade tensions and a weakening U.S. dollar. As of April 21, 2025, spot gold hit a record high of $3,391.62 per ounce, while U.S. gold futures rose to $3,402.80 per ounce, marking a 1.9% and 2.2% increase respectively. ​ 

Gold prices are on a historic tear, with Comex Gold Futures surging to $3,407 per ounce, marking a staggering 60% gain since March 2024. The rally, fueled by a crumbling U.S. dollar, intensifying geopolitical risks, and policy uncertainty from Washington, is reshaping investor sentiment across global markets.A primary catalyst behind gold's meteoric rise is the dramatic weakening of the U.S. dollar, now trading at a three-year low. Traditionally, a softer dollar boosts gold demand, as it becomes cheaper for investors holding other currencies. With the dollar sliding, gold has re-emerged as the go-to safe-haven asset in turbulent times. 

Markets were jolted after  US President Donald Trump announced intentions to overhaul the Federal Reserve, accompanied by renewed public criticism of the central bank’s monetary stance. This move has sparked concerns over the Fed's independence, shaking investor confidence and contributing to the flight toward gold.

 

   

Factors Influencing the Gold Rally

Trade War Uncertainty: The intensifying trade war between the U.S. and China has led to the imposition of new tariffs, increasing market volatility and driving investors towards safe-haven assets like gold. ​

 

Declining U.S. Dollar: The U.S. dollar index has fallen to a three-year low, making gold more attractive to international investors. ​

Central Bank Purchases: Major central banks, including the Reserve Bank of India, have been aggressively buying gold, further supporting its price. ​

 

Market Outlook and Investment Strategies

 

Analysts suggest that while gold prices are at record highs, they may continue to rise due to ongoing geopolitical tensions and economic uncertainties. However, some caution that the market is approaching overbought conditions, with the Relative Strength Index (RSI) at 75, indicating a potential near-term correction. ​

 

Investment Recommendations

 

Short-Term Investors: Consider entering positions above Rs 88,800 with a stop loss around Rs 88,550, targeting Rs 89,300. ​

 

""Gold prices extended their record-breaking rally as the fresh week kicked off with strong early buying. Comex gold approached the $3,400 mark, trading near $3,395, while MCX gold surged to Rs 96,775, registering fresh all-time highs.

 

The rally is being supported by escalating tariff tensions, concerns over the US economic outlook, and the looming US debt crisis. Continued buying from China, global central banks, and institutional investors has added momentum to the bullish sentiment.

Technically, as long as Comex holds above $3,250 and MCX above ₹91,000, the uptrend remains intact. Any dips towards ₹93,000 in MCX may offer fresh buying opportunities. However, given the elevated levels, speculators are advised to maintain low-risk positions to manage potential volatility," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

 

"Gold prices continues to surge (Comex Futures $3407 an ounce) as US Dollar tumbles. Its more than 60% gains since March 2024. The short-term rally remains debatable beyond $3500. However, the longer term underlying bullish strength could well surpass $3500 and scale unpredictable highs. Every price correction could well see only higher lows with supports seen at $3280, $3150 and $3080," said NS Ramaswamy, Head of Commodities at Ventura.

 

Long-Term Investors: Maintain a diversified portfolio with gold allocations, keeping an eye on central bank policies and global economic developments.   

Robust Gold ETF Demand Continues

 

"Gold-backed ETFs experienced strong buying interest in March, with all regions contributing to the inflows. US funds led the charge with US$6 billion (67t) of net inflows, followed by Europe and Asia, each with approximately US$1 billion in net inflows. This continued buying pace in ETFs indicates a sustained investor appetite for gold as a safe-haven asset amidst prevailing uncertainties," said Motilal Oswal in a note.