Gold Price Hits Record High: What’s Fuelling the Surge?

By Team Gullak

Last updated : Oct 1, 2026

3 min read

Gold prices soared to a record ₹87,529 on February 5, 2025, continuing its strong momentum from 2024, where it delivered ~29% returns. In just the 1st 6 weeks of 2025, prices have increased by ₹8529/10 gms. Let’s break down what’s fuelling this rally and what to expect next.

Why is the Gold price Rising?

Global Factors for Gold price increase

Trade Tensions: The U.S. imposed a 10% import duty on Chinese goods, prompting China to retaliate with 15% tariffs on coal and LNG. Trump’s reluctance to negotiate has heightened market uncertainty, pushing investors toward gold.

Weak U.S. Job Data: Job openings in December fell to 7.6 million (vs. an expected 8 million), signaling a slowdown. The dollar index dropped from 109.80 to ~107.90, further boosting gold.

Domestic Factors for Gold price increase

Stock Market Decline: FII sell-offs have weakened Indian markets, prompting investors to seek stability in gold.

Lower Tariffs on Jewellery: The 2025 Budget reduced gold jewellery tariffs from 25% to 20%, driving higher demand.

What’s Next for Gold in 2025?

Rising economic uncertainty, inflation, movements in the rupee, central bank purchases, geopolitical risks and market volatility can all influence gold demand and prices. However, gold prices can move in either direction, and future performance is not guaranteed.

For people looking to build their gold savings over the long term, platforms like Gullak allow you to accumulate gold gradually rather than making a large purchase at once. You can start from ₹100/day and choose daily, weekly or monthly SIPs, or make one-time transactions based on your needs.