A year ago, an investor’s investment of Rs 5 lakh in gold would have increased to about Rs 8.72 lakh today due to the Multi Commodity Exchange (MCX) gold spot prices surging more than 74 percent during that time due to increased demand for safe havens and global concern.
The spot price of 10 grams of MCX gold increased from Rs 92,020 on May 15, 2025, to Rs 1,60,501 on May 14, 2026. Geopolitical tensions, central bank purchases, and ongoing demand from investors looking for stability amid erratic market circumstances have all contributed to the gold rise.With MCX futures holding above Rs 1,62,000/10g, gold is currently trading above $4,600/oz on COMEX, already up 44% year over year. The structural bull case is still strong for the upcoming year, according to Renisha Chainani, head of research at Augmont.
The Iran War maintains demand for safe havens high, central banks are expected to purchase 700–900 tonnes a year, and a chronically weak US currency acts as a tailwind.According to Chainani, “MCX is a structural outperformer versus COMEX on any given price level because the reinstated 15 percent import duty in India creates a sustained domestic premium over international prices.”
The main factors influencing gold prices are explained by NS Ramaswamy, Ventura’s head of commodity and CRM.
Tailwinds
Global debasement commerce and alternative fiat. worldwide debt issues.
Gold’s function as a hedge against historically high stock/bond correlations and a diversifier.
Investor interest for gold ETFs has increased.
Strong physical demand from central banks that is not cyclical
Recent quarter-over-quarter declines in global mine production of 8.64% demonstrate how difficult it is for physical supply to respond to price increases.
A deficit is produced by the structural discrepancy between stagnant mining output and growing investment demand.
Headwinds
Higher interest rates and a hawkish Fed shift would strengthen the dollar and make non-yielding gold less appealing if inflation continued.
A stronger dollar.
If disputes are settled, the “fear premium” that underlies high gold prices may disappear.
Large-scale speculation (profit-taking)
Change in central bank purchasing: If increased prices have assisted in reaching their desired reserve percentage, the rate of purchases will slow.
Import taxes have the potential to stifle domestic retail demand and consumption.
Gold prospects
According to the World Gold Council’s outlook, geoeconomic uncertainty is the primary source of support, with central bank purchases expected to continue robust and jewelry demand remaining muted due to record prices.According to Prithviraj Kothari, managing director of RiddiSiddhi Bullions Ltd., “the West Asia crisis, US inflation running at 3.8 percent, and a hawkish Fed pivot risk are the key headwinds — but each correction historically resolves within gold’s decade-long structural uptrend.” India’s recent 15 percent import duty adds a country-specific domestic premium layer, reinforcing ETF and digital gold demand over physical.
According to Chainani, demand for ETFs and investments will more than offset the effect on the jewelry market. Fears of a Fed rate hike and global de-escalation continue to be the biggest downside threats, but each correction in this cycle has ended as a buying opportunity, so the route will not be straight. “Over the next 12 months, I see COMEX gold targeting the $5,500–$6,000 range, with MCX tracking commensurately higher towards the Rs 2 lakh level,” she stated.
“Gold’s 12-month outlook remains structurally bullish with tactical volatility,” stated Kothari. By the end of 2026, prices might reach $6000/oz thanks to consistent investor and central bank demand of 585 tonnes per quarter on average.
How should investors proceed?
Given the risks, experts advise avoiding lump-sum investments and using gold as a way to diversify a portfolio.According to Rajkumar Subramanian, Head-Product & Family Office, PL Wealth, “near-term sentiment appears stretched after the sharp rally over the past year and could lead to periods of consolidation or short-term corrections if tensions ease.”At the current levels, investors should consider gold as a strategic portfolio diversifier rather than making aggressive lump-sum investments. According to Subramanian, “a staggered allocation strategy is still preferred, with 10–15% portfolio exposure to gold continuing to support long-term resilience.”
