In the first half of 2025, gold has been the undisputed star of the investment world. According to the World Gold Council (WGC), gold prices soared to 26 new all-time highs during this period—outshining every other major asset class with a remarkable 26% return. But the big question remains: Can gold sustain this momentum in the second half of the year? Let’s explore what drove this golden rally, the outlook ahead, and the smartest ways to invest in gold now.
The World Gold Council attributes this impressive surge in gold prices to three key global factors:
Weakening US Dollar
A soft dollar made gold more attractive as an alternative investment across global markets.
Lower Interest Rates
With central banks maintaining a low interest rate regime, investors turned to gold for better returns.
Geopolitical and Economic Uncertainty
Rising global tensions and economic volatility boosted demand for gold as a safe haven.
These conditions triggered a significant inflow of investments into gold, pushing it to outperform equities, real estate, and even crypto in terms of returns.
The WGC anticipates a potential 0–5% additional rise in gold prices if the current economic sentiment remains stable. However, they also warn that financial markets rarely move in line with popular expectations. Here are two scenarios:
Geopolitical tensions escalate
Global economic slowdown continues
Inflation concerns deepen
In this case, gold prices could rise by another 10–15%, making it even more valuable for portfolio hedging.
Trade tensions ease
Global markets stabilize
Interest rates rise moderately
Gold demand may weaken, possibly triggering a 12–17% drop in prices.
Experts suggest allocating 5–10% of your portfolio to gold for better diversification and risk management. Here are the top four investment routes:
Issued by the RBI since 2015, SGBs offer fixed interest and capital appreciation linked to gold prices.
Tenure: 8 years (with early exit from the 5th year)
Tradability: Listed on NSE/BSE
Bonus: Exempt from capital gains tax if held to maturity
These track the price of physical gold and are traded on stock exchanges.
1 unit = 1 gram of gold
Requires Demat account
Lower cost than physical gold
These funds invest in Gold ETFs but don’t need a Demat account.
More accessible for small investors
Higher expense ratio than ETFs (1–2%)
Still popular in India, but comes with challenges like:
Purity verification
Storage & security
Lower liquidity & resale value
For transparent, tax-efficient investing, financial experts recommend digital options like SGBs or ETFs over physical gold.
With its unmatched performance in early 2025, gold has proved to be a dependable investment amid global uncertainty. While the second half may see more volatility, strategic investment through regulated channels can still yield strong returns. Whether you're a conservative investor or seeking diversification, gold remains a relevant and rewarding asset—just ensure you choose the right vehicle to ride the wave.
