Latest news with #GoldValuationFramework
Arabian Business
16-07-2025
- Business
- Arabian Business
Always believe in gold: Indestructible asset surges 26% in H1 2025 as dollar hits 50-year low
Gold has emerged as one of the top-performing global assets in the first half of 2025, soaring 26 per cent in US dollar terms, according to the World Gold Council's (WGC) Gold Mid-Year Outlook 2025. The surge coincides with the US dollar experiencing its weakest start to a year since 1973, reshaping global investment flows as investors seek something they can believe in. The WGC report highlights that gold remained indestructible and posted double-digit returns across nearly all major currencies and outperformed equities, bonds, and other asset classes. Gold price forecast Key drivers of the rally include a weakening dollar, rangebound interest rates, and growing geoeconomic uncertainty—conditions that have triggered a sharp uptick in investment demand. Gold had the power to rise and recorded 26 new all-time highs (ATHs) in the first half of the year, having broken through 40 new ATHs in 2024. Looking ahead, the WGC presents three potential outlooks for the second half of 2025 using its Gold Valuation Framework: Base case: A modest 0–5 per cent rise, assuming a gradual return to economic normality Bull case: A further 10–15 per cent increase if global conditions deteriorate or volatility surges Bear case: A 12–17 per cent decline if macroeconomic tensions ease and risk appetite returns With central banks continuing to diversify reserves and investors seeking safe-haven assets, gold's role as a strategic portfolio hedge remains in sharp focus.
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Business Standard
16-07-2025
- Business
- Business Standard
Gold hits ₹95,000 in India: Should you buy, hold, or sell in H2 of 2025?
Gold has been the glittering outperformer in 2025 so far, delivering a 26% return in US dollar terms—and even more for Indian investors who rode the INR rally. But as we enter the second half of the year, a question is echoing across portfolios: is the rally over, or is there more upside left? According to a mid-year report by the World Gold Council, geopolitical tensions, a weakening US dollar, and interest rate uncertainty were key drivers behind gold hitting 26 new all-time highs (ATHs) this year, with prices averaging $3,067 per ounce in H1 and ending June at $3,287/oz. H1 2025: What Fueled Gold's 26% Surge? US Dollar weakness: The greenback had its worst start to the year since 1973. Interest rates stabilising: Rate cuts now look imminent in the US and EU. Geopolitical instability: War, trade conflicts, and political volatility drove safe-haven demand. ETF flows: Global gold ETFs saw net inflows of 397 tonnes, pushing total assets under management to $383 billion. Central bank buying: Despite not being record-setting, demand remains above pre-2022 averages. In India, gold prices crossed ₹95,000 per 10 grams, delivering over 26% year-to-date (YTD) returns. Given rising inflation expectations due to tariffs, and gold's historic correlation with uncertainty, retail investors have been reallocating into the yellow metal through Sovereign Gold Bonds (SGBs), ETFs, and even digital gold platforms. What Could Happen in H2 2025? Scenarios & Strategy The World Gold Council's Gold Valuation Framework outlines three macroeconomic scenarios for the second half of 2025: Base Case (Consensus View) Fed Rate Cut by 50 bps US GDP growth below trend, CPI at 2.9% Gold Outlook: Flat to 5% upside Strategy: Stay invested, avoid aggressive new allocations Bull Case (Deteriorating Conditions) Stagflation or recession Flight to quality + lower yields + dollar underperformance Gold Outlook: 10%–15% upside, potential to end year up 40% Strategy: Consider adding gold via SGBs or ETFs if macro stress rises Bear Case (Risk Resolution) Geopolitical tensions ease Economic confidence returns; rates rise again Gold Outlook: 12%–17% downside Strategy: Book partial profits, reallocate to equities or debt Key Data Highlights (as of 30 June 2025) What Should Indian Retail Investors Do? If you're already invested: Stay put; trim only if gold crosses 40% of your asset mix. Consider locking in partial gains using SGBs, which offer tax-free capital gains on maturity. If you're looking to enter: Start small, via ETFs or monthly SIPs in gold mutual funds. Use dips, especially if gold falls near the $3,000/oz (₹90,000/10g) range. Avoid overexposure. Even in bullish scenarios, gold should not exceed 10%–15% of your total portfolio. This is exactly what the World Gold Council has to say: Gold enters the second half of 2025 coming off an exceptionally strong start to the year – up 26% – shaped by a weaker US dollar, persistent geopolitical risk, robust investor demand and continued central bank purchases. While some of these drivers are expected to persist, the path forward remains highly dependent on multiple factors including trade tensions, inflation dynamics, and monetary policy. Consensus expectations suggest a relatively steady finish for gold with moderate upside potential if macro conditions hold. Gold could also be partly supported by contributions from new institutional investors such as Chinese insurance companies. A more volatile geopolitical and geoeconomic scenario could push gold significantly higher, particularly if more substantial stagflation or recession risks materialise and investor appetite for safe haven assets grows. On the flip side, while seemingly unlikely given the current environment – widespread and sustained global trade normalisation would bring higher yields and resurgent risk appetite, challenging gold's momentum. Gold could also be tested by a visible deceleration in central bank demand beyond current expectations. In all, given the intrinsic limitations of forecasting the global economy, we believe that gold – through its fundamentals – remains well-positioned to support tactical and strategic investment decisions in the current macro landscape.
