Why Are Gold Prices Rising, Should You Invest Add More To Your Portfolio Or Sell Now? – News18
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Gold and silver prices have risen sharply in the past few weeks with the gold hitting nearly Rs 90,000 per 10 grams on the MCX and silver crossing above the Rs 1-lakh-per-kg mark.
Though risk-reward ratio is better in gold, upside potential is better in silver with a bit of volatility, says an expert.
Gold and silver prices have risen sharply in the past few weeks with the gold hitting nearly Rs 90,000 per 10 grams on the MCX and silver crossing above the Rs 1-lakh-per-kg mark. In the international market, the price of gold currently stands at nearly $3,025 an ounce. Analysts expect it to hit up to $3,500 an ounce. Should you invest in gold now or wait for correction?
Why Are Gold Prices Rising?
Analysts say the gold prices have been rising on the back of global economic uncertainties due to Trump tariffs and geopolitical tensions.
“Gold maintains its winning streak above $3025 (~Rs 88500) as Trump’s tariffs are projected to exacerbate inflation and economic turmoil. Trump said he would hold Iran accountable for any strikes carried out by the Houthi group it supports in Yemen, as his administration escalated the largest US military operation in the Middle East since Trump came to the White House,” said Renisha Chainani, head of research at Augmont.
Central banks’ accumulation of gold reserves, inflation concerns, and rising demand after the pandemic have contributed to the surge in gold prices, Chainani added.
The US Fed, which will announce its interest rate decision after its two-day meeting on Wednesday, is expected to maintain its benchmark interest rate in the 4.25%-4.50% range.
“Geopolitical risks remain elevated, with the US reaffirming military action against Houthi forces. Pentagon spokesperson Parnell warned of severe consequences for any attacks on US troops. Meanwhile, Israel detected heightened Hamas activity near Gaza, potentially signaling new strikes. Today, Gold futures surge to all-time high of $3024 amidst heightened investor anxiety stemming from concerning US economic data and escalating Middle East tensions. Now, market focus now turns to the Fed’s policy meeting for insights into future monetary policy,” Kotak Securities said in its note on Tuesday, March 18, 2025.
What Is The Price Target?
Brokerages expect gold prices to rise up to $3,500 an ounce.
Bank of American estimates the gold rate to remain at $3,000 an ounce, while Macquarie sees it at $3,500. Goldman Sachs expects the yellow metal’s price at $3,100, BNP Paribas at $3,100, and Citi at $3,200.
In rupee terms, analysts in India expects the yellow metal to hit the Rs 1 lakh mark in the medium to long term.
However, in the near term, they anticipate the yellow meta to hover near Rs 90,000 per 10 grams.
“Gold Apr Futures after achieving the $3000 (Rs 88,000) milestone, now is expected to extend this run up towards $3035 (Rs 88,800) and $3080 (Rs 90,000) in the coming weeks. After that, we can see some retracement and profit-booking, which can extend down to $2800 and $2700 maximum,” said Augmont’s Renisha.
Gold Outlook
According to Economic Times, Chirag Mehta, CIO of Quantum AMC, warns that gold’s rally may slow as diplomatic talks stabilise markets and inflation remains in check. Ventura Securities adds that a strong dollar and uncertain Fed rate cuts could cap prices. Experts point out that gold’s near-term risk-return payoff is not in its favour.
However, Motilal Oswal Director Kishore Narne said, “Risk-reward ratio is still better in gold.”
Silver Price & Outlook
Silver prices crossed the Rs 1 lakh mark recently and is hovering at Rs 1,03,000 in the spot market.
Motilal Oswal Director Kishore Narne said, “Though risk-reward ratio is better in gold, upside potential is better in silver with a bit of volatility. We have revised upwards our target from Rs 1 lakh earlier to Rs 1,25,000 per kg now. So, gold is for those looking for stability as stability is still better in gold. However, more upside potential is in gold.”
