Gold Prices Surge 23 Per Cent Year-To-Date In 2025: Know What's Driving The Rally

Gold Rate: The yellow metal has extended its rally in 2025 so far, with global gold prices surging beyond the $3,200 per troy ounce mark. Closer home, gold prices in India also surged to record highs on April 17, as the yellow metal traded at Rs 98,170 per 10 grams.

So far in 2025, the London Bullion Market Association (LBMA) gold price has climbed by $621 per troy ounce, or 24 per cent, to $3,230 per troy ounce. Domestic spot gold prices have also mirrored this trend, surging 23 per cent on a year-to-date basis, according to the World Gold Council's report.

What's Driving The Rally

The WGC also stated in its report that several factors, such as a weak US Dollar, increased geopolitical uncertainties, and tariff-led fears, have contributed to the rally in gold prices. The report also found that robust gold exchange-traded fund buying has increased gold prices.

Domestic Gold Prices Lower Than International Benchmarks

WGC also stated that in the past four months, domestic gold prices have remained lower than international benchmarks (after adjusting for exchange rates and taxes). The discounted prices result from tepid jewellery demand amid rising prices. The report claimed that the average difference between domestic and international gold prices has widened from $12 per troy ounce in mid-March to over $30 per troy ounce on April 11.

Gold Buying Trends

The steep rise in gold prices has kept many buyers on the sidelines limiting the demand to purchases for the purpose of crafting jewellery particularly for weddings. Additionally many buyers are also opting to trade in old jewellery for new as per the WGC. The report also suggested that buyers are purchasing the yellow metal from an investment perspective as well.

The WGC projects that festival and wedding-related purchases are likely to persist. Additionally, the WGC expects gold's role as a store of value to become more pronounced. Additionally, large retailers of gold remain upbeat about the outlook for the April-June quarter based on indicators such as advance bookings for regional festivals like Akshaya Tritiya. The report added that retailers also plan to add 150 to 200 new showrooms over the next 12 months.

Gold Imports

Despite gold prices touching all-time highs in March, imports of the yellow metal rebounded. Breaking a two-month declining spree, data from the Ministry of Commerce said that imports climbed to $4.4 billion, growing nearly 100 per cent compared to the previous month's figure and 187.582 per cent compared to the $1.53 billion imports made in March 2024. The WGC added that import volumes for the month of March ranged between 47 trillion and 52 trillion. 

On the other hand, the Reserve Bank of India added 0.6 trillion of gold to its reserves in March 2025. The central bank resumed purchases after observing a brief pause in February. The WGC said that this brings RBI's total gold holdings to 879.6 trillion, or 11.7 per cent of its total foreign exchange reserves.