Gold Crosses Rs.1 Lakh: Is Rally Sustainable or Nearing Exhaustion?

Mumbai, 22 April 2025: Gold prices surpassed a psychological milestone today, as MCX October futures touched an intraday high of ₹1,00,484 per 10 grams—the first time Indian markets have witnessed gold trading above the ₹1 lakh mark. The contract eventually closed at ₹99,178, registering a gain of ₹1,899 on the day.

This marks the fourth consecutive session of gains, fuelled by a cocktail of geopolitical risk, safe-haven buying, central bank purchases, and US dollar weakness. But now that the milestone has been breached, the pressing question is: can this rally extend further, or is a correction due?

What’s Driving the Rally?

Safe-haven inflows: Heightened geopolitical tensions and macroeconomic instability have heightened investor appetite for gold.

Dollar weakness: A soft US dollar has boosted the relative value of gold globally.

Central bank demand: Central banks across the globe continue to accumulate gold as part of their reserve diversification strategies.

Domestic sentiment: Akshaya Tritiya-related buying is lending seasonal support to the Indian market.

Rally Momentum or Resistance Zone?

Now that gold has breached ₹1 lakh—a critical technical and psychological threshold—market participants are closely watching for signs of either continuation or reversal.

Bullish case:

• Global risk aversion remains elevated
• Further weakness in the dollar
• Concerns around inflation and stagflation

Central banks maintaining gold purchases through 2025

Bearish risk:

• Profit-taking at psychological highs
• Stabilisation of equity markets or reversal in interest rate trends
• Recovery in risk assets drawing flows away from bullion

What Should Investors Do?

• Gold’s long-term outlook remains constructive, but investors should avoid emotional or reactive buying at peak levels.
• If underexposed, consider a staggered entry via Sovereign Gold Bonds (SGBs) or Exchange Traded Funds (ETFs).
• If already exposed, review your allocation—a 5–10% exposure is generally considered optimal for diversification.
• Avoid large allocations in pursuit of quick gains—gold is a hedge, not a growth asset.

Bottom Line

The ₹1 lakh level has been crossed—but whether it is a breather or a breakout is to be seen in how global macro stories shape up over the next few weeks. For now, gold remains a beneficiary of fear-driven flows—but as always, discipline outweighs FOMO in portfolio decisions.