Our Bureau
Mumbai
Gold prices have surged 63% over the past year, driven by central banks purchasing a record 316,000 kg of the metal, signaling deepening global instability and a shift away from the US dollar. An investment expert described the rally as a “red alert that the global order may be fracturing at its core,” emphasizing that fear is now driving investors toward gold rather than traditional safe havens like the dollar or US Treasuries. This historic accumulation reflects eroding confidence in fiat currencies, particularly after the US dollar posted its largest six-month decline in 50 years.
Central banks, especially in BRICS nations, are leading this strategic pivot. Countries like China, India, and Russia are increasingly using gold to reduce dollar dependence, a move accelerated by the 2022 freezing of Russia’s foreign reserves. In the past year, gold’s share of total reserves rose to 35.8% in Russia, 6.7% in China, 13.1% in India, and 16.6% in the UK. This trend is reinforced by geopolitical tensions, trade wars, and expectations of falling real yields, all of which diminish trust in government-backed currencies.
The implications extend beyond reserves. On October 23, 2025, MCX gold futures hit ₹1,24,233 per 10 grams, reflecting strong domestic demand amid speculation of an upcoming India-US trade deal. While silver and platinum are also rising due to industrial and green-tech demand, gold remains the primary beneficiary of macroeconomic anxiety. Analysts warn that as long as geopolitical risks persist and central banks continue diversifying, gold will retain its lustre as “trust without a signature”.
