Gold's Unprecedented 2025 Rally: A 74% Surge Amid Global Turmoil
In times of global upheaval, gold has historically glittered as a beacon of safety. However, bullion traders assert that the most dramatic rally in recent decades unfolded in 2025, propelled by escalating tariff conflicts, geopolitical flashpoints, and a fundamental transformation in global reserve strategies. Domestic prices skyrocketed by as much as 75% during this period, culminating in an annual increase of 74%.
Historical Context and the 2025 Surge
Traditionally serving as a hedge against economic and political instability, gold has witnessed significant surges during crises such as the 2008 financial collapse, the 9/11 terror attacks, the Covid-19 pandemic, and even the Great Depression of 1929. Yet, market participants highlight that the 2025 upswing was notably sharper and more widespread than previous cycles.
The rally gained momentum following the United States' announcement of fresh tariffs in April 2025, initially set at 26% and later escalated to 50% in July. In response, domestic gold prices surged between 58% and 75% until February 6. Prices climbed from approximately Rs 91,500 per 10 grams in early April to around Rs 1,01,400 by the end of July. Overall, gold prices in 2025 rose by 74%, bolstered by tariff shocks, geopolitical tensions, and robust central bank acquisitions.
For comparison, gold increased by 38% after the first Covid-19 case was reported outside China in January 2020, and gains stood at 36% during the 2008 Lehman Brothers collapse. Analysts attribute the current rally to heightened volatility in global financial markets and a growing diversification away from dollar-centric assets.
Expert Insights on the Rally's Drivers
Haresh Acharya, director of the India Bullion and Jewellers' Association (IBJA), emphasized that this rally transcends traditional safe-haven demand. He stated, "We are witnessing an unusual confluence of factors shaping investor behavior. Alongside geopolitical tensions and tariff-driven shocks, there is a broader reassessment of confidence in the US dollar as the undisputed global reserve currency. Both central banks and private investors are increasingly diversifying reserves into precious metals. While the dollar remains dominant, this recalibration of trust is a pivotal driver behind gold's current strength."
According to the World Gold Council, gold experienced a historic, record-breaking ascent, with prices achieving 53 new all-time highs globally and rising over 70% in certain markets. The WGC Gold Demand Trends Report noted, "This surge was fueled by intense geopolitical tensions throughout the year, tariff wars, central bank buying, and safe-haven investments. Unlike past crises, the 2025 rally was driven by a blend of massive ETF inflows, high-volume bar and coin demand, and structural shifts in central bank holdings."
Investment Trends and Market Impact
The assets under management (AUM) for Gold ETFs in Gujarat surged by 162%, escalating from Rs 681.53 crore to Rs 1,792.37 crore. Nationally, AUM growth for gold ETFs reached 173%, closing at Rs 1.2 lakh crore in December 2025.
Jayesh Vithalani, a financial adviser, commented, "Globally, the US dollar has weakened against most major currencies, despite gaining against the Indian rupee. This divergence has had a ripple effect on investor behavior. We are observing a clear transition away from equities into physical gold and gold ETFs, driven by anticipations of further price appreciation. Both gold and silver posted robust rallies, reinforcing sentiment around precious metals as safe-haven assets, particularly with central banks continuing to accumulate gold. Investment demand remains bullish, although jewellery purchasing has stayed subdued as consumers hesitate at current price levels."
