Gold May See 10% Correction In 2 Months And 30% Fall In A Year, Say Experts

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Gold prices are not changing despite escalations in Middle East; experts say its rates are likely to have peaked out and may fall from $3,400 to $2,400 in a year if tensions ease.
Gold Rate Prediction 2025: After rising nearly 30% this year, gold prices are not changing despite escalations in the Middle East tensions. According to experts, the yellow metal is likely to have peaked out and might see a correction of about 10% in the next one-two months and around 30% in the next one year.
Backing up their projections, experts say the bullion markets have already factored in geopolitical tensions, central bank buying, ETF demand, and de-dollarisation.
Citibank has revised downwards its gold price target for the next one year. According to its report, Citi has cut its gold rate expectation for the next three months from $3,500 per ounce to $3,300, and for the next 6-12 months to $2,800 as against $3,000 an ounce earlier.
Ajay Kedia of Kedia Advisory told CNBC Awaaz, 'In the past 10-20 years, we not seen a situation where simulteneous wars are happening in the Middle East as well as in the Black Sea, and still the geopolitical situation is escalating. In seven days of the ongoing Israel-Iran war, gold surged on the first day. But, after that, though tensions have escalated, gold is not reacting. It shows this factor has matured."
He, however, said it has been noticed in the past that during such escalations, gold takes a stepback and then makes a recovery. 'For that, gold needs to rise above the $3,500 level in the international market."
Currently, spot gold stands at $3,371.15 an ounce in the international market.
'However, whatever story we have heared in the past five years — geopolitical tensions, central bank buying, ETF demand, de-dollarisation; the bullion market has already factored in," he said.
'So, in the next one-two months, gold might see a correction of 8-10% easily. Gold may fall to $2,700-2,800 in the next one year. It might even fall to $2,400 if global tensions ease significantly," Kedia added.
The $2,400 is more than 30% down as compared to the current gold price levels.
Discussing the impact of higher gold prices on retail market, Shreyansh Kapoor of Kashi Jewellers said rising gold prices are not good sign for the retail market. 'In such a situation, people start selling their old jewellery to take profits. Higher prices also affect wedding budgets."
He, however, said it is a good opportunity for those who want to make short-term gains.
'I have never seen so many people coming and selling gold. In my 25 years of experience, I have never seen that so many people are taking out their old jewellery to encash it. Earlier, 5-7% people used to come to sell back their old jewelleries. Now, it is 25%. It includes both exchanging and encashing," Kapoor said.
Recently, brokerage house Quant Mutual Fund in its 'Factsheet for June 2025' also said gold has peaked out and might correct by 12-15% in the next two months.
'Gold has peaked out and has the potential to correct by 12-15% in dollar terms over the next two months. However, our medium-term and long-term views are equally constructive, and we reiterate that a meaningful percentage of your portfolio should be dedicated towards precious metals," Quant Mutual Fund stated.
Gold prices have increased nearly 30% to $3,355 an ounce this calendar year. It had stood at nearly $2,600 as of January 1, 2025.
The rates have increased due to increased investor demand for safe-haven assets amid escalating geopolitical and economic uncertainties. Investor sentiment turned defensive on the back of US President Donald Trump's tariff decisions, rekindling trade war concerns with China. Escalating tensions in the Russia-Ukraine conflict further strengthened the safe-haven demand.