After A 57% Rally In 2025, Is Gold Still A Safe Haven This Dhanteras?

Dhanteras marks the beginning of Diwali celebrations in India, a time during which people clean their homes, decorate them, and perform rituals, such as Lakshmi Puja and Dhanvantari Puja to invite prosperity and good health.

One of the most popular traditions is buying new items, especially precious metals, such as gold and silver, which are believed to attract wealth and prosperity. This year, Dhanteras falls on Saturday, October 18.

Beyond its cultural significance, gold has also emerged as a key investment asset, especially in the past few years. Over the past five years, gold prices have surged by more than 150 per cent, according to data from GoldPrice.org. Much of these gains have come in 2025 alone.

This year, 24 karat gold has jumped nearly 57 per cent to Rs 12,441 per gram, while 22 karat gold has risen by a similar margin to Rs 11,405 per gram, according to Good Returns. This rally in gold has renewed interest among investors who view gold as a hedge against economic uncertainty and a safe-haven asset during turbulent times. Amid this gold rush, many investors are wondering if the metal is still a viable investment option at its current value and whether it can continue to safeguard their hard-earned money. Here’s what experts have to say.

Is Gold Still A Safe Haven

Experts say that gold’s appeal as a safe-haven investment is still intact, particularly during periods of geopolitical or economic uncertainty. However, they also advise investors to exercise caution and avoid overexposure while buying gold.

Tejas Shigrekar, chief technical research analyst – commodities and currencies at Angel One, says, "Globally, gold prices are still supported by geopolitical tensions and economic uncertainty."

Kaynat Chainwala, assistant vice president – commodity research at Kotak Securities, adds that the metal’s rally has been “well-supported by robust central bank buying, strong ETF inflows, and ongoing geopolitical uncertainty.”

However, both the experts caution against overexposure in gold in the near term. Shigrekar says that investor appetite may shift towards riskier assets in 2026 due to potential interest rate cuts and indications of economic stabilisation, which would lessen the appeal of gold.

In its September meeting, the US Federal Reserve announced a 25 basis point (bps) rate cut, bringing it down to the 4-4.25 per cent range. Market participants are expecting two more cuts before the end of 2025. Meanwhile, the Reserve Bank of India (RBI) kept its key repo rate unchanged at 5.50 per cent in its October meeting, but another rate reduction is widely anticipated by December 2025.

Recently, Israel and Hamas agreed to a first-phase ceasefire and hostage-prisoner exchange deal, moving a step closer for a possible end to the conflict in Gaza. The agreement involves Israel’s partial withdrawal, the release of remaining hostages by Hamas, and the freeing of several hundred Palestinian prisoners by Israel. Soon after this announcement, US President Donald Trump also claimed that Washington and its NATO allies are “stepping up the pressure” to end the Russia-Ukraine war. These major geopolitical events are indicating signs of stabilisation.

Trade-related tensions, particularly those linked to Trump tariffs, also appear to be easing. On October 9, Prime Minister Narendra Modi and Trump held a telephonic conversation to review progress on the India-US trade deal, signalling the deadlock between the two countries might end soon.

Shigrekar adds that the allure of gold as a hedge may diminish further if the rupee gains strength, and inflationary pressures decrease. Chainwala adds: “The primary near-term risks to gold come from potential threats to the Fed’s easing trajectory. If US inflation rises significantly or the labour market shows a sharp rebound, the US Fed may hesitate to cut rates, which could weigh on gold prices.”

However, seasonal demand during this festive and wedding season in India is expected to keep gold prices buoyant.

In September 2025, India's imports of gold and silver nearly doubled compared to August, despite record-high prices. According to trade and government sources, India imported 64.17 tonnes of gold worth $5.4 billion and 410.8 tonnes of silver worth $451.6 million in August, as reported by Reuters.

Shigrekar also highlights that prices may see a short-term correction. He says, "Technically speaking, the prices had been trading in an overbought trajectory for the previous few weeks, which is a classic indication of waning bullish momentum. The technical setup suggests a short-term correction as the strong bearish trend persists."