Gold Investors Realize 74% Returns in Past Year: What's Ahead for the Market?

Gold Prices Soar as Global Uncertainty and Safe-Haven Demand Drive Investment

Investors who had put Rs 5 lakh in gold a year ago are now seeing their investment grow to nearly Rs 8.72 lakh today, thanks to the significant increase in Multi Commodity Exchange (MCX) gold spot prices. Over the past year, MCX gold spot prices have climbed from Rs 92,020 for 10 grams on May 15, 2025, to Rs 1,60,501 on May 14, 2026, representing a staggering 74 percent increase.

This surge in gold prices has been driven by a combination of factors, including geopolitical tensions, central bank buying, and continued demand from investors seeking stability in volatile market conditions. The current global economic situation has led to a rise in safe-haven demand, with gold prices trading above $4,600/oz on COMEX, while MCX futures are holding above Rs 1,62,000/10g, already up 44 percent year-on-year.

According to Renisha Chainani, head of research at Augmont, the structural bull case for gold remains firmly intact, with central banks projected to buy 700–900 tonnes annually. The reinstated 15 percent import duty in India creates a sustained domestic premium over international prices, making MCX a structural outperformer versus COMEX on any given price level.

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NS Ramaswamy, head of commodity & CRM at Ventura, identifies the key tailwinds and headwinds driving gold prices. The main tailwinds include central bank purchases, safe-haven demand, and a persistently weak US dollar, while the key headwinds include a hawkish Fed pivot risk, US inflation running at 3.8 percent, and the West Asia crisis.

The World Gold Council's outlook highlights geoeconomic uncertainty as the main support for gold prices, with central bank purchases likely to stay strong, while jewellery demand remains subdued due to record prices. Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd, notes that India's fresh 15 percent import duty adds a country-specific domestic premium layer, reinforcing ETF and digital gold demand over physical.

Experts recommend that investors view gold as a means to diversify their portfolio and avoid lump-sum investments given the risks. Rajkumar Subramanian, Head-Product & Family Office, PL Wealth, suggests that investors should avoid aggressive lump-sum allocations at current levels and instead view gold as a strategic portfolio diversifier. A staggered allocation approach remains preferable, with 10–15% portfolio exposure to gold continuing to support long-term resilience.

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