Gold At Rs 90,000: Dollar, Trump, Tariffs - Is Rs 1 Lakh Next For The Yellow Metal?

Gold and silver prices have hit fresh record highs, with gold soaring past Rs 90,000 per 10 grams in India's bullion markets. This steep rise is in line with international trends, fueled by global uncertainties, US trade policies, and market speculation. As of March 18, 2025, gold prices stood at Rs 96,220 per 10 grams.

Investors and consumers alike are now asking: Is this rally sustainable, and could gold prices touch Rs 1 lakh in the near future? Experts believe a mix of geopolitical factors, monetary policies, and speculative demand is at play.

Trump, Tariffs, and Geopolitical Uncertainty: The Perfect Storm?
Donald Trump 's tariff policies have created a ripple effect across global markets, pushing investors towards safe-haven assets like gold. Additionally, geopolitical tensions—particularly the ongoing conflicts involving Russia-Ukraine and Israel-Hamas—have heightened the demand for gold as a hedge against uncertainty.

Commodity expert G Chandrashekhar highlighted that geopolitical instability remains a primary driver behind gold’s recent rally. "Gold prices have been rising over the last one to one-and-a-half years, primarily due to geopolitical uncertainties. The war between Russia and Ukraine, and the Israel-Hamas conflict have significantly influenced gold as a safe-haven asset," he explained.

However, he also warned that once these conflicts subside, the risk premium built into gold prices—estimated at $250-$300 per ounce—could fade, leading to a price correction.

Dr Renisha Chainani, Head of Research at Augmont, added: "Yeah, so in 2024, there were two factors—geopolitical tensions and Fed monetary easing—that pushed up prices. This year, Trump tariff uncertainty has further impacted the US economy, increasing safe-haven buying in gold."

The Role of the US Dollar and Federal Reserve Policies

Another key factor behind gold’s price surge is the relative weakness of the US dollar. Until mid-2024, the dollar remained weak, making gold more attractive.

However, with a strengthened dollar, Chandrashekhar believes this could act as a headwind for further price gains.

He said, "Gold prices keep moving up, but as they rise, the probability of a big correction also increases. If investors have bought gold at lower prices, this might be a good time to book profits."

Dr Chainani echoed this sentiment, stating that the dollar index has fallen by 5-6% over the last two months, leading to increased gold investment.

"The equity and bond markets have come down, and that money is now shifting into gold. The fall in the dollar index has further boosted this trend," she said.

The Federal Reserve’s stance on monetary easing also plays a critical role. Historically, lower interest rates tend to drive gold prices higher, as investors move away from yield-generating assets like bonds.

Will Gold Reach Rs 1 Lakh Per 10 Grams?
Speculation is rife that gold could cross the Rs 1 lakh mark. However, Chandrashekhar dismissed this notion, stating: "I don’t see gold reaching Rs 1 lakh at all. Speculative interest is high, but when global markets are not supportive, such expectations may not hold true. The Indian market follows international prices, and unless gold crosses $3,000 per ounce in global markets, Rs 1 lakh per 10 grams in India is unlikely."

Dr Chainani also weighed in: "I don’t expect the Rs 1 lakh price target in the near term unless there’s a major global event like a new war or economic crisis. As per current conditions, prices should top out around Rs 90,000 to Rs 91,000."

The Indian rupee’s depreciation—from Rs 83-84 per US dollar to nearly Rs 87—has also made gold imports more expensive. However, Chandrashekhar emphasized that currency fluctuations alone cannot push gold to Rs 1 lakh unless there are new major global crises.

Gold Investment Trends: Is Demand Sustainable?
Dr Chainani pointed out that while jewelry demand has slightly slowed, investment demand remains robust. "Jewelry demand declined by about 2-3% last year, but investment demand compensated for it. Investors are preferring gold bars, coins, and digital gold over jewelry."

She also highlighted a shift in purchasing behavior: "We have seen an increase in digital gold investments. Even small investors are entering the market, with platforms allowing purchases as low as Rs 50."

Market Outlook: A Period of Consolidation Ahead?
Experts believe that gold may enter a consolidation phase in the coming months. Dr Chainani noted that after such a rapid rally, prices typically stabilize before another major move.

"In April 2025, we could see a consolidation phase. For gold prices to sustain their bull run, a period of stabilization is necessary. I expect prices to hover around $3,080 to $3,100 per ounce in global markets, translating to Rs 90,000 to Rs 91,000 per 10 grams in India,” she added.

Should You Buy, Sell, or Hold?
With gold at record highs, investors are faced with a crucial decision—book profits or hold for further gains? Chandrashekhar recommends caution, urging investors to consider selling at current levels and reinvesting profits selectively.

"The probability of correction is high. If you’ve bought gold at lower levels, this is a good time to sell and lock in profits," he said.

On the other hand, Chainani believes that long-term investors may still benefit from gold, especially if geopolitical tensions persist.

As global markets remain volatile, gold’s journey towards Rs 1 lakh remains uncertain. While speculation is driving interest, fundamental factors suggest a period of stabilization before any further major price movements.