Gold prices concluded the final trading session of 2025 with a decline, yet the precious metal sealed a truly historic year, registering its most powerful annual performance in more than four decades. Despite the year-end dip, the yellow metal's spectacular rally throughout 2025 has cemented its status as a top-performing asset.
A Historic Year for Gold: 80% Surge in 2025
The year 2025 will be remembered as a landmark period for gold. Prices skyrocketed by approximately 80% over the course of the year, marking the steepest annual climb since 1979. This monumental rise was driven by a powerful confluence of factors. Aggressive interest rate cuts by the US Federal Reserve, coupled with market expectations of continued monetary easing, laid a strong foundation. These financial dynamics were further amplified by persistent geopolitical tensions across the globe, relentless and heavy purchasing by central banks worldwide, and robust inflows into gold-backed Exchange Traded Funds (ETFs).
The profit-taking that led to Wednesday's price easing was triggered in part by a margin increase on precious metal futures contracts announced by the CME Group, prompting some traders to lock in gains after the incredible run.
Record Highs on MCX and Current Levels
In the Indian market, the rally translated into unprecedented numbers. On the Multi Commodity Exchange (MCX), domestic gold prices soared to an all-time peak of ₹140,465 per 10 grams during the year. This record-setting moment highlighted the intense bullish sentiment among Indian investors. As markets wrapped up on Wednesday, the last day of the year, prices were seen trading below the ₹1,35,000 per 10 grams mark, reflecting the session's corrective pullback.
Gold Price Outlook for 2026: What to Expect?
As the market turns its gaze to 2026, analysts are evaluating whether the bull run can sustain its momentum. Rajeev Sharan, Head of Criteria, Model Development & Research at Brickwork Ratings, provided key insights. He pointed out that a major question for the coming year is whether the sustained gold-buying spree by central banks will be sufficient to support valuations if a technical market correction takes hold.
However, Sharan emphasized that the fundamental drivers behind gold's strength are far from fading. Persistent inflation concerns, weakness in major global currencies, and ongoing geopolitical uncertainty are forces that remain potent. He believes these underlying factors are strong enough to weather any potential short-term correction. Consequently, Sharan anticipates gold prices to remain firmly anchored within a range of USD 4,500 to USD 5,000 per ounce in the foreseeable future.
The journey of gold in 2025 has been nothing short of extraordinary, setting a high benchmark. While the new year may bring volatility, the foundational reasons for holding gold appear to be intact, promising another year of keen investor interest.
