New Delhi [India]: Gold prices in India reached an unprecedented high on Tuesday, crossing ₹1 lakh per 10 grams. While the surge has prompted expectations of a potential short-term correction, experts suggest that any pullback is likely to be modest — not exceeding 10%.
Traditionally seen as a hedge against inflation and economic turmoil, gold is attracting renewed attention from investors amid global uncertainty. With inflation concerns, geopolitical tensions, and central bank actions shaking market confidence, gold’s appeal as a safe-haven asset has only grown stronger.
Speaking to media, Rajesh Rokde, Chairman of the Gem and Jewellery Council of India (GJC), said that slight corrections following a sharp rally in gold prices are a common and temporary phenomenon.
“Whenever there’s a sharp rally in gold, a 10 per cent correction is normal. It’s usually a temporary pullback and doesn’t last long. Overall, Goldman Sachs also expects gold to touch USD 4,000 per ounce. This rally is being driven by two key factors, de-dollarisation and increased gold purchases by central banks amid global economic uncertainty caused by tariffs,” he told ANI.
Rokde also highlighted the ongoing trade tensions between the US and China as a major contributing factor to the gold rally. He noted that even China’s insurance sector is increasing its gold investments as a buffer against financial instability.
“In every rally, we generally see only a 10 per cent correction,” Rokde explained.
“For instance, when gold was at USD 1,000 per ounce, the correction would typically be around USD 100. Now, with gold trading around USD 3,400 per ounce, we can expect any correction to be in the range of USD 340, give or take,” he added.
The tariff policies introduced under former US President Donald Trump have also contributed to the rise in gold prices, fueling concerns about a potential recession and encouraging investors to flock toward gold.
Sharing his thoughts on gold’s enduring value, Uday Kotak, Founder and Director of Kotak Mahindra Bank, applauded the foresight of Indian households.
“The performance of gold over time highlights that the Indian housewife is the smartest fund manager in the world. Governments, central banks, economists, who support pump priming, high deficit funding, may need to take a leaf from India, a net importer of store of value forever!” he posted on social media.
Despite the potential for minor fluctuations, analysts maintain a bullish outlook on gold, citing strong global demand and persistent economic uncertainty. The rally appears far from over, with market sentiment suggesting further upside in the long term.