Kolkata: The status of gold as a tool for safe investment dates back to centuries, perhaps as old as the discovery of this shinning yellow metal as an object of adorning the human body. Gradually, it has become an inseparable part of the Indian culture and heritage. But it’s the investment value of gold which has been in the news for the past few years.
“Whether it’s for a daughter’s wedding or a portfolio rebalancing, the question we keep hearing at our showrooms is: Will prices go up next year? And in 2025, it’s a fair question to ask,” Aditya Modak, COO and CFO of P N Gadgil & Sons, the 193-year old Pune-based jewelers. Modak told News9live.com on what could be their possible gold strategy as the metal keeps hogging the headlines in a climate dominated by geopolitical tensions, inflation and central bank purchases.
What should Indian investors do
“Timing gold purchases is always tricky, but being entirely out of it is riskier,” said Modak as he proceeded to outline the possible strategies for different classes of people.
Traditional buyers: If you plan to make a significant jewellery purchase, consider doing so during a price dip. Monitor global prices and rupee-dollar trends. Pre-booking schemes, like the ones we offer, help lock in prices and reduce risk, is Modak’s formula.
Investors: “They should diversify and should not bet on physical gold alone. Consider SGBs (which offer 2.5% annual interest) or gold mutual funds if you are seeking portfolio exposure without the hassle of storage,” said the P N Gadgil expert.
Long-term holders: Remember that gold works best as a wealth preserver, not a wealth multiplier. It won’t yield equity-like returns, but in times of crisis, it provides much-needed stability.
Projection for gold this year
Modak indicated that prices would remain elevated. Most forecasts have said that gold prices in the international market in 2025 will average between $2,780 and $3,170 per ounce. This scenario assumes persistent inflation and mid-year rate cuts. In India, that could mean gold in the range of 80,000 to Rs 91,500 per 10 grams-or higher if the rupee weakens further. But projections are not certainties, he cautions. Modak thinks that a smarter approach is to follow a disciplined strategy: “buy gradually, stay diversified, and keep your long-term goals in focus”.
Factors influencing prices this year
Central bank policies: “If the US Federal Reserve and other major banks start cutting rates, gold could rise further. Lower interest rates reduce the opportunity cost of holding gold, which does not earn interest, making it more appealing,” says Modak. Furthermore, central banks of several countries are showing buying interest in 2025.
Rupee depreciation: Depreciation of the rupee compared to the US Dollar, could make gold dearer in India since gold in imported in dollars and Indians, who buy it in rupees, are at the receiving end of the exchange rate disadvantage.
Geopolitical uncertainty: The price of gold always faces upward pressure in wars and similar geopolicitcal crises. If the conflict in Ukraine and West Asia persist, the prices could remain elevated.
Domestic demand: “With festivals and weddings continuing to drive demand, and younger investors entering the gold ETF and sovereign gold bond (SGB) market, domestic appetite is unlikely to cool,” remarked Modak.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals and crypto assets.)
From adorning a woman to a hedge against inflation, the uses of gold are varied in India. Aditya Modak, COO and CFO of P N Gadgil & Sons has a few tips for buyers and investors alike. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
