Gold’s dazzling rally in 2025 has captivated global markets — a rare and spectacular ascent that has seen prices surge over 50% year-to-date, breaching $4,000 on COMEX and touching ₹1,20,000 domestically. The metal has clocked over 35 new record highs this year, as investors embrace tangible assets amid global uncertainty. Silver too has mirrored gold’s brilliance, soaring over 60% YTD across exchanges.

What began as a cautious start to the year has turned into a full-fledged super cycle, driven by capital rotation from bonds and riskier assets into safe havens. The question now — is this a fleeting blaze, or the dawn of a new financial order?

Macro Factors Fueling the Rally

The rally in precious metals has been underpinned by a steady dollar index below 100 and rupee appreciation, both of which have supported domestic prices. Markets are now pricing in a 70% probability of U.S. Federal Reserve rate cuts in October and December, amid weaker U.S. labor data and rising fiscal concerns.

Political uncertainty in Japan following the election of fiscal dove Sanae Takaichi has added to global safe-haven demand, while China’s bid to become a global gold custodian is bolstering structural support.

Mr. Manav Modi, Analyst, Commodities & Currencies, Motilal Oswal Financial Services Ltd., said: “Gold’s stellar rally reflects a confluence of macro shifts — from fiscal uncertainty and softer dollar to strategic diversification by central banks. Asia is emerging as the epicenter of this new monetary alignment.”

Global Supply and Demand Dynamics

Global mine output has stayed largely static in 2025, constrained by ore-grade decline, environmental regulations, and rising operational costs. Recycling has increased modestly but remains below past bull-market levels.

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Demand, however, has been robust — led by China, India, Turkey, and the Middle East, where currency weakness and inflation have driven record safe-haven buying.