Gold has always been considered one of the safest investment options. In India, the fascination with gold is not just cultural but also financial. Over the past six years, the price of gold has seen an unprecedented surge, raising important questions for both investors and common buyers.

From costing around ₹30,000 for 10 grams just a few years ago, the price has climbed to nearly ₹1 lakh by July 2025. This marks a massive 200% increase in only six years. The question on everyone’s mind now is whether gold prices could hit ₹2.5 lakh per 10 grams in the foreseeable future.

Gold Prices Have Seen Unprecedented Growth

In earlier years, gold prices remained well below the ₹50,000 mark for 10 grams. Today, the story is entirely different. The market has witnessed an extraordinary surge, with 24-carat gold touching ₹1,02,640 per 10 grams in Delhi. The rate of 22-carat gold has also been recorded close to the same level.

The situation is almost identical across major Indian cities. In the past, 10 grams of gold was affordable for many households at around ₹30,000. By mid-2025, however, the prices have not only breached the ₹1 lakh mark but have maintained a strong upward momentum. This jump of 200% in six years reflects significant changes in both domestic and international economic conditions.

Why Are Gold Prices Increasing So Rapidly?

When gold prices soar, one of the most common questions people ask is why. Analysts point to several contributing factors, most of them linked to global uncertainties.

Ongoing geopolitical tensions, such as the prolonged Russia-Ukraine conflict, have played a major role. Additionally, continued unrest between Iran and Israel has further added to the instability. Global markets tend to respond to such tensions by shifting capital into safer assets, and gold is one of the most preferred safe-haven investments.

Apart from geopolitical issues, the lingering effects of the COVID-19 pandemic have impacted global economies. Uncertainty in the financial markets and fears of recession have driven investors toward gold as a secure option.

Gold as a Safe-Haven Asset

Historically, gold has been a trusted store of value during times of crisis. April 2025 was a clear example of this trend. On the Multi Commodity Exchange (MCX), the price of 10 grams of gold reached ₹1,01,078.

Experts, as quoted by Live Mint, suggest that if the current trajectory continues, the price of 10 grams could rise to ₹2,25,000 in the next five years. Between 2019 and 2025, gold prices have increased at an average annual rate of 18%. Should this growth persist, the ₹2.5 lakh milestone may not be far away.

The Role of Global Economic Trends

The performance of gold is deeply connected to the global economy. High inflation rates, fluctuating currency values, and reduced confidence in equity markets tend to boost gold prices.

International trade disputes and tariff wars have also added to market volatility. In such times, institutional investors and central banks often increase gold reserves, pushing prices further upward.

However, recent reports indicate that central banks are now purchasing gold at a slower pace. China, for example, has invested only 1% of its total insurance sector assets into gold. This change in demand patterns could influence future price trends.

The Possibility of Market Consolidation

While predictions of ₹2.5 lakh gold seem possible under current growth rates, not all analysts agree. Some believe the gold market may soon enter a consolidation phase. In such a scenario, prices may remain stable unless triggered by another major geopolitical or economic event.

Market consolidation typically happens when an asset reaches a peak after rapid growth. The absence of strong new buying triggers could lead to sideways trading, keeping prices within a set range for an extended period.

Factors That Could Push Gold Prices Higher

Several developments could drive gold prices to new highs:

• Escalation of existing geopolitical tensions

• Sharp rise in inflation rates

• Global economic slowdown or recession

• Sudden surge in central bank gold purchases

• Weakening of major currencies like the US dollar

If any of these occur, demand for gold as a safe-haven asset could spike dramatically.

Factors That Could Stabilize or Reduce Prices

On the other hand, certain changes could slow or reverse the current upward trend:

• De-escalation of geopolitical conflicts

• Recovery and stabilization of the global economy

• Strong performance of equity markets

• Decline in investor demand for safe-haven assets

• Increased gold mining output and supply growth

A balanced global environment could keep prices steady for years.

Investor Strategy in a High-Price Environment

For long-term investors, gold remains a reliable component of a diversified portfolio. However, experts caution against buying at peak levels without considering market corrections.

Short-term traders often take advantage of price volatility, while long-term holders benefit from gradual appreciation. Small investors may choose to invest in gold exchange-traded funds (ETFs) or sovereign gold bonds rather than physical gold to avoid making purchases at inflated rates.

Historical Trends Support Long-Term Gains

Looking at the past few decades, gold has consistently provided positive returns over the long term. From the early 2000s, when prices were under ₹5,000 per 10 grams, to the current ₹1 lakh-plus level, the growth trajectory has been impressive.

Even during periods of price correction, gold has managed to recover and move higher over time, solidifying its position as a valuable asset class.

The ₹2.5 Lakh Question

If gold prices continue to rise at the same annual growth rate observed since 2019, the ₹2.5 lakh mark for 10 grams could be reached within the next decade. However, this prediction assumes a continued state of global uncertainty and consistent demand.

Should the global economy stabilize significantly, the rise could slow down, pushing the ₹2.5 lakh milestone further into the future.

The surge in gold prices from ₹30,000 to ₹1 lakh in just six years highlights the strength of this precious metal as both a cultural symbol and an investment tool. While the possibility of ₹2.5 lakh per 10 grams cannot be ruled out, market forces, global stability, and investor sentiment will ultimately decide the pace of growth.