Up 25% YTD! Motilal Oswal says Gold rally has more legs as prices hit record highs

Gold has emerged as one of the best-performing asset classes in 2025 so far, surging nearly 25 percent year-to-date (YTD) and scaling fresh all-time highs on both the MCX and COMEX platforms. According to Motilal Oswal Financial Services Ltd (MOSL), this rally has been underpinned by escalating geopolitical tensions, mounting trade disputes—especially between the US and China—and a notable spike in safe-haven demand from retail and institutional investors alike.

Silver, too, has trailed gold’s upward path, posting a solid 15 percent gain YTD on COMEX, Motilal Oswal noted. The firm said that the momentum in precious metals has been fuelled by fears of stagflation, persistent inflation, and global macroeconomic uncertainty, pushing investors to seek the relative safety of bullion.

Central bank buying, policy risks fuel bullish momentum

Motilal Oswal maintained a bullish outlook for gold, citing sustained central bank buying, high inflation, and deteriorating trade relations as long-term catalysts. On the technical front, the brokerage said gold has strong support around ₹91,000 and resistance near ₹99,000 on MCX, while on COMEX, the crucial levels to watch are USD 3,100 on the downside and USD 3,400 on the upside.

“Gold continues to be a beacon of stability in a world increasingly marked by policy uncertainty and volatile geopolitics,” said Navneet Damani, Group Senior Vice President and Head of Commodity & Currency Research at Motilal Oswal Financial Services. “As central banks shore up their reserves and investors seek refuge from inflation and trade disruptions, we continue to advocate a ‘buy on dips’ strategy for gold over the medium to long term,” Damani added.

Meanwhile, Satish Dondapati, Fund Manager at Kotak Mahindra AMC, echoed similar views. “So far gold has soared over 25 percent, including a 6 percent gain since 2nd April post tariff announcement by the US. Going forward, gold will remain strong in the short term if trade tensions escalate. However, the long-term outlook remains bullish, supported by strong central bank purchases and geopolitical uncertainties,” Dondapati noted.

Trade tensions, weak dollar extend support

So far this year, gold has significantly outpaced silver in both scale and pace of gains, MOSL observed. The firm pointed to recent US policy announcements, including former President Donald Trump’s call for sharply higher tariffs on Chinese imports, which temporarily weighed on gold prices but failed to derail the broader uptrend. The Trump administration’s tariff escalation—targeting over 50 trading partners and levying duties as high as 145 percent on Chinese goods—has already drawn retaliatory moves from China, amplifying fears of a prolonged economic slowdown or even stagflation in the US.

Further adding to gold’s appeal, Motilal Oswal highlighted a weakening US dollar, which has depreciated over 7 percent against major currencies in 2025. Simultaneously, US Treasury yields have risen, driven by unwinding hedge fund positions amid growing inflation expectations. Emerging market central banks, particularly China, have also been steadily ramping up their gold reserves, which MOSL said adds structural support to global gold prices.

In addition, the Federal Reserve's monetary policy trajectory has been closely watched. Following three rate cuts in 2024, the US central bank has adopted a cautious stance in 2025. While former President Trump has lobbied for more cuts to stimulate the economy, Fed Chair Jerome Powell has flagged inflationary risks stemming from elevated tariffs and fragile global growth, MOSL noted.

Despite a strong US labour market and low unemployment offering some support to the economy, the overall global macroeconomic backdrop remains favourable for gold. Motilal Oswal concluded that unless significant progress is made toward resolving global trade tensions, gold’s bull run is likely to persist, supported by policy uncertainty, central bank buying, and safe-haven flows.

Technical signals point to caution near highs

According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, gold prices showed signs of fatigue, slipping below recent highs as COMEX traded near USD 3,324 and MCX gold hovered around ₹95,250. The metal struggled to break past the key resistance at USD 3,350. On the downside, strong support lies between USD 3,280 and USD 3,290, making this zone critical for maintaining bullish momentum.

At these elevated levels, volatility remains high, and any fresh buying should be approached with caution, he said. A decisive break below USD 3,290 could trigger further downside, opening the door for a corrective move towards USD 3,150 in the near term.

With gold prices touching record highs and delivering near-25 percent YTD gains, Motilal Oswal Financial Services reiterated that gold remains a compelling hedge against inflation, trade frictions, and global macro instability. In light of continued central bank accumulation and elevated geopolitical risk, the brokerage advised long-term investors to accumulate gold during dips, maintaining a positive outlook on the yellow metal’s performance in the coming quarters.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.