Analysts anticipate the ongoing bull run in gold prices to persist, with the precious metal potentially reaching $5,000 per ounce in the international market. This surge is attributed to rising global uncertainties, including renewed trade tensions between the US and China, the prolonged US government shutdown, potential rate cuts by the US Fed, a weakening dollar and central banks expanding their gold reserves.
Gold crossed the $4,000 per ounce mark on October 7, trading at a high of $4,114.20 on October 13 at the Comex.
Bank of America raised its gold price outlook for 2026 to $5,000 per ounce on Monday, citing prospects for a near-term correction but with an overall upside.
“The White House’s unorthodox policy framework should remain supportive for gold given fiscal deficits, rising debt, intentions to reduce the current account deficit/capital inflows, along with a push to cut rates with inflation around 3 per cent,” BofA said.
“We could see bouts of correction. However, persistence above the all-time highs could take prices towards targets of $4,200 and $4,500 on Comex, and assuming an exchange rate at ₹89 per dollar, ₹1,27,000 and ₹1,35,000 on the domestic front, from a medium to long-term perspective,” said Manav Modi, an analyst at Motilal Oswal Financial Services.
Amit Jain, co-founder of Ashika Global Family Office Services, said the prolonged US government shutdown and fiscal uncertainty are heightening global risk aversion, driving investors towards gold and silver. “Historically, such fiscal standstills have weakened confidence in the dollar’s stability. This time, the situation is compounded by record debt levels now above $35 trillion and slowing economic momentum,” he said.
Upasana Chachra, chief India economist, and Bani Gambhir, economist at Morgan Stanley India, in a report said that a combination of cyclical and structural factors has fuelled the rally in gold prices. “Globally exacerbated geopolitical tensions and the ongoing rate easing by the Fed, expected to continue in the coming months, along with a weakening dollar, have acted as another trigger for an uptick in gold prices,” the report mentioned.
A structural driver is the near doubling of gold holdings by central banks worldwide over the past decade. “India, in particular, has steadily increased its gold reserves to 14 per cent of total forex reserves in September 2025 from 8.1 per cent in September 2023,” the report added.
Structural shift
Market observers indicate that the rising demand for financial assets backed by precious metals signifies a structural shift rather than mere portfolio recalibration during an euphoric cycle. “Everyone is a buyer of gold in this rally, from retailers to central bankers. Speculative positions have surged for both gold and silver. With momentary liquidations, net longs have been building since the start of this year,” Modi said.
“Family offices and institutional investors are increasing allocations to tangible assets as a hedge against policy volatility and debt-driven distortions in financial markets. Precious metals now serve not only as a store of value but also as a stabilising component in diversified portfolios. This move reflects a clear recalibration of long-term capital strategy rather than a short-term reaction to market uncertainty,” said Jain.
“Exchange traded funds (ETFs), gold market-linked debentures (MLDs) and digital gold and silver have become increasingly popular among retail investors, offering low entry points (starting from just ₹10), high liquidity and freedom from making charges,” Vijay Kuppa, CEO of InCred Money, said.
Household reserves
According to the Morgan Stanley India report, as of June 2025, India cumulatively holds 34,600 tonnes of gold, valued at over $3.7 trillion.
This is significantly higher than the World Gold Council report in July 2023, which estimated households’ gold reserves at around 25,000 tonnes.
“Gold acts not only as a hedge against inflation and currency depreciation but also aids in portfolio diversification. More recently, while demand for jewellery has been tepid due to rising gold prices, investment demand through digital platforms in gold ETFs has been on the rise,” the report concluded.