Gold gains 25% in 2025; outlook remains firm: Motilal Oswal
New Delhi: Gold has delivered a stellar performance in the first four months of 2025, gaining nearly 25 per cent and marking all-time highs on both MCX and COMEX.
Silver has also followed suit with a 15 per cent price gains on COMEX.
This sharp rally is attributed to a combination of heightened geopolitical risks, trade tensions--particularly between the U.S. and China--and a surge in safe-haven demand from both institutional and retail investors, Motilal Oswal Financial Services Ltd (MOFSL) said in a report.
The outlook for gold remains constructive, Motilal Oswal said.
Persistent trade tensions, inflationary pressures, and central bank gold purchases are expected to continue supporting prices.
As per Motilal Oswal, technical levels indicate strong support for gold around Rs 91,000 per 10 grams and resistance near Rs 99,000 on MCX, while on COMEX, key levels to watch are USD 3,100 per ounce and USD 3,400.
With the global economy navigating through policy uncertainty and slowing growth, gold is likely to remain an attractive asset class.
"In an environment dominated by policy uncertainty, inflationary pressures, and volatile geopolitics, gold continues to be a beacon of stability. As central banks bolster their reserves and investors seek safety, we believe gold will remain a favoured asset. Barring any significant resolution in global trade tensions, we maintain a 'buy on dips' view from a medium to long-term perspective," said Navneet Damani, Group Senior Vice President, Head Commodity and Currency Research, Motilal Oswal Financial Services.
Gold's momentum has notably outpaced silver's so far this year, both in terms of scale and pace.
Following recent comments from President Trump regarding higher tariffs on Chinese goods, gold briefly corrected but quickly recovered--demonstrating resilience and investor confidence.
The Trump administration's aggressive trade stance has targeted dozens of trading partners, with particularly steep tariffs imposed on China (up to 245 per cent), prompting retaliatory measures from Beijing.
This has led to market-wide concerns of a prolonged slowdown or potential stagflation in the U.S. economy.
Further compounding these risks is a weakening US dollar, which has declined by over 7 per cent against major global currencies this year.
"Central banks, especially in emerging markets like China, have been steadily increasing their gold reserves, further bolstering demand and price stability," MOFSL said.
The Federal Reserve's monetary policy has also influenced market sentiment. After three interest rate cuts in 2024, the Fed has taken a "wait and watch" approach in 2025 to assess the economic fallout from ongoing trade policies.
While President Trump has openly advocated for further rate reductions to stimulate growth, Fed Chair Jerome Powell has maintained a cautious stance, citing inflationary risks from tariffs and broader economic uncertainties.
"However, the broader global macroeconomic environment continues to favour gold and other safe-haven assets. Unless a meaningful resolution to global trade disputes is reached, the upward trajectory for bullion prices appears well-supported in the medium to long term," MOFSL added.
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