In 2025, gold has surprised investors as prices continue to touch new record highs. The unprecedented rally is a reason for celebration for some investors, but it has also raised a question: Is investing in gold at this level still wise? Is gold still a reliable hedge against uncertainty, or could this rally soon turn into a correction?
In this article, we will break down the current gold rally, investor trends, and outlook to help you make an informed decision.
What’s Happening?
The surge in gold prices is not limited to international markets but is clearly visible in Indian markets as well. On October 8, 2025, gold prices on the Multi Commodity Exchange (MCX) in India crossed the psychological level of Rs 1,22,000 per 10 grams for the first time, touching a new all-time high of Rs 1,23,080 per 10 grams. This marks a historic moment in the domestic market, reflecting the strong demand for gold.
A similar trend is seen globally, where gold prices have reached $4,000 per ounce. The pace of this rally can be gauged by the fact that since April 1, 2025, gold has jumped by nearly $1,000 in just 210 days, rising from $3,000 to $4,000 per ounce.
Record Investments in Gold ETFs
Gold ETFs have delivered a record-breaking performance in 2025. According to data from the World Gold Council, India witnessed inflows of $2.18 billion (YoY) into Gold ETFs this year, the highest ever. This figure is several times higher compared to $1.28 billion in 2024, $295.3 million in 2023, and just $26.8 million in 2022.
In September 2025 alone, Indian Gold ETFs saw net inflows worth $902 million, marking a 285% surge compared to $232 million in August. Currently, there are 21 active Gold ETFs in India managing a combined AUM of Rs 72,495 crore.
The rising investments in Gold ETFs indicate that investors now view gold not only as a safe hedge but also as a stable, long-term asset for wealth creation.
This Diwali – Gold or Stocks?
During the festive season of Diwali, investors are faced with one key question: should they buy gold or invest in stocks? Over the past year, gold has delivered nearly 50% returns, while the Nifty50 has remained almost flat. In India, gold ETFs like GOLDBEES have generated around 55% returns in one year, making gold the best-performing asset class of 2025.
However, the picture changes when viewed from a long-term perspective. Over the last 10–15 years, Nifty50 ETFs have delivered a CAGR of 12–15%, whereas gold’s long-term CAGR has been around 8–9%. According to analysts, companies increase earnings, pay dividends, and benefit from India’s growing economy, while gold primarily preserves value during periods of uncertainty.
What’s in It for Investors?
Gold’s rally continued in September, marking its 39th all-time high in 2025. Investors have turned toward safe-haven assets amid global political uncertainty and a weakening US dollar. In September alone, gold hit 13 new record highs, and the momentum has carried into October.
According to Mint, Renisha Chainani, Head of Research at Augmont, believes this is neither the time to chase prices aggressively nor to book profits completely. She suggests that investors adopt a staggered investment approach, investing gradually in Gold ETFs or digital gold through SIPs during price dips.
For long-term investors, staying invested in gold remains a wise choice, as it continues to serve as a strong hedge against global uncertainty, geopolitical tensions, and rising inflation.
What’s Next?
In the past 20 years, gold prices have declined only four times, and even then, the fall was limited to single digits, making it a reliable long-term asset.
Goldman Sachs estimates that if the US Federal Reserve cuts interest rates, investors may shift toward gold, potentially driving prices higher. However, experts say that gold is currently technically overbought, so gains may be limited in the near term. Still, MCX has set a target of Rs 1,25,000–Rs 1,28,000 per 10 grams for the year-end.
Additionally, if equity market volatility rises in October and the dollar weakens, it could act as a key trigger for the next gold rally.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
