According to JP Morgan, futures positioning in gold markets remains positive, with investor expectations of future price increases.
Gold prices surged by Rs 2,000 to hit a fresh peak of Rs 94,150 per 10 grams in the national capital on Tuesday. This is the steepest increase in nearly two months. The previous record one-day jump in gold price was recorded on February 10, when it gained Rs 2,400 per 10 grams. While gold prices are already at all-time highs, they are expected to rise even further.
According to Wealth Wisdom India Private Limited, the gold prices saw a notable increase of 31.37 per cent, reflecting positive returns during the financial year 2024-25. Also, it outperformed India’s Nifty 50 index in the last 25 years.
Why is gold performing at its best?
According to Krishna Patwari, founder & managing director of Wealth Wisdom India Private Limited, gold prices reached new record highs early in 2024, surpassing $2,900 per ounce in February, fueled by escalating geopolitical tensions, including the U.S.-China trade conflict.
“The imposition of tariffs, such as the 25 per cent tariff on steel and aluminum imports by the U.S., contributed to the rise in gold prices. The growing concerns about economic growth and inflation risks are expected to continue driving strong investor demand for gold, reinforcing its reputation as a safe-haven asset,” he added.
According to JP Morgan, futures positioning in gold markets remains positive, with investor expectations of future price increases. In 2024, long positions in COMEX gold reached a new high. While futures positioning reflects short-term expectations, gold investor holdings also include gold ETFs and physical gold.
While both stocks and gold were affected by global market challenges in 2015, leading to declines in investor sentiment, gold delivered positive returns in 12 of the last 15 years, with an average annual return of 20 per cent. In comparison, equities have seen an average growth of about 18 per cent.
However, Patwari feels that gold will lead as India’s top-performing asset in 2025, with year-to-date gains of 13.5 per cent, outpacing the negative returns from domestic equities and surpassing fixed-income assets like bonds and bank deposits.
“The World Gold Council reported that gold prices reached 13 new highs in 2024, crossing the $3,000 per ounce mark. Economic factors like geopolitical uncertainty, a weaker USD, lower interest rates, and inflation concerns are driving investment demand and influencing gold prices. This ongoing momentum highlights gold’s resilience and its growing role in investor portfolios,” Patwari said.
“As traditional gold forms, like jewelry and coins, remain popular, gold Exchange Traded Funds (ETFs) have gained momentum. Gold ETFs offer liquidity, transparency, and ease of trading without concerns about storage or theft. In FY 2024-25, India saw significant inflows into gold ETFs, amounting to Rs 14,948 crore—nearly triple the previous year. Assets under management for gold ETFs also rose by 95.2 per cent, reaching Rs 55,677 crore by February 2025, highlighting the growing interest in this digital investment form,” he concluded.
