As Diwali 2025 approaches, gold has become a popular topic among investors, with some analysts predicting a surge that could see gold prices crossing Rs 1 lakh per 10 grams by next year’s festive season. In India, where gold symbolizes prosperity, many people consider it a secure, reliable investment. The recent rise in gold prices has only fueled this belief, with data from the Indian Bullion and Jewelers Association (IBJA) showing an increase from Rs 60,282 per 10 grams last Diwali to the current Rs 78,577. This substantial jump of over 30% has left many wondering if now is the right time to invest.
Why Are Gold Prices Rising?
Several factors are behind the consistent upward trend in gold prices:
- Global Economic Uncertainty:
Political and economic shifts worldwide, like the upcoming US presidential elections, influence the global financial landscape. With rising uncertainty, investors are gravitating towards assets like gold, which typically hold their value better during volatile times. - US Federal Reserve Policy:
Experts believe that upcoming Federal Reserve meetings could impact interest rates, which would likely push gold prices even higher. A rate cut in November could make gold more attractive, leading to more demand and a subsequent price increase. - Inflation and Currency Concerns:
Rising inflation and a weakening rupee have also affected gold prices in India, as a depreciating currency makes imports like gold more expensive. - Safe-Haven Investment:
With stock markets showing volatility, investors are increasingly turning to gold as a defense against potential losses in other asset classes.
The DSP Mutual Fund’s Insights on Gold Investments
In its October 2024 Netra report, DSP Mutual Fund highlighted the benefits of holding gold in one’s portfolio. The report notes that gold has provided positive returns in emerging markets, making it a smart choice in times of economic instability. Including gold in an investment portfolio can also lower overall risk and offer a buffer against sharp market fluctuations, a critical consideration for those looking to safeguard their investments amid economic changes.
How Gold Fits into a Balanced Investment Strategy
Gold’s value as a hedge against stock market dips makes it a good option for diversifying one’s investments. Ventura Securities analysts emphasize that gold’s role isn’t necessarily about high returns but rather about balancing an investment portfolio. Historical data shows that gold performs well during periods when equity markets struggle, reinforcing its reputation as a “safe-haven” asset.
For investors seeking stability, especially during a period of uncertainty, holding gold can offer peace of mind along with growth potential.
What Experts Say About Gold’s Future Potential
Financial experts predict that gold will continue to thrive in the current global climate. Santosh Joseph, CEO of Germinate Investor Services, advises that given the uncertainties, now might be an ideal time to include gold in one’s portfolio. With the price already rising by 30% over the last year, market experts estimate that gold could easily reach Rs 1,03,000 per 10 grams by Diwali next year if the current trend continues.
Should You Consider Investing in Gold Now?
With gold prices soaring, it may be tempting to invest with hopes of high returns. For those looking for long-term stability, gold offers both security and steady returns. Over the past five years, domestic gold prices have doubled, and they have increased tenfold over the last 20 years. As we head into 2025, experts agree that gold could cross the Rs 1 lakh threshold by Diwali, making it a worthwhile consideration for Indian investors looking for stability amid fluctuating financial markets.
Whether for cultural reasons or investment purposes, adding gold to your portfolio may be a smart move in the coming months, as global factors point towards a potentially golden opportunity for Indian investors.
