Should You Invest in Gold Now?

Gold has a strange way of entering conversations. Someone mentions inflation, or the markets look jumpy, and suddenly gold reappears as the asset we all look at again. If you have been thinking about when to invest, or whether the “gold price trend” still makes sense in 2025, this guide will help you see the full picture: The golden past, present, and future.

Let us walk through it step by step.

The Golden Five years and Trends: 2020-2025

If you ask how the gold price trend has evolved, the last five years provide a clear upward tilt. In India, for example, the average price per 10 g (24-karat) moved roughly from ₹52,950 (As on 13th Nov 2020) in 2020 to about ₹1,28,375 in 2025 (As on 14th Nov 2025). The compound annual growth rate (CAGR) over the last five years has been about 19.5% .

Source

The gold price trends behind this movement are fairly consistent. Gold tends to perform well when:

• Inflation is elevated (eroding real returns on cash and bonds),
• Global uncertainty (geopolitical or economic) is high, • The equity markets are under stress or real yields are low or negative.

Also, gold has typically had an inverse correlation to equities or high-beta assets, making it an attractive hedge during bouts of risk.

In short, gold has rallied, the gold price trend is intact, but it is not immune to corrections.

Reasons for This Run-Up

Several key drivers underpin the recent gold rally:
1. Central bank buying gold (reserve accumulation): As per the 2025 report of World Gold Council, Central banks around the world have accumulated over 1,000t of gold in the last 3 years or so, which is significantly higher than the previous average of 400-500t of the last decade.

Reasons: diversification away from the US dollar, fear of sanctions, inflation hedge.

2. Wars and sanctions: The invasion of Ukraine by Russia in 2022 triggered far-reaching sanctions. Many countries observed how reserve assets denominated in dollars or foreign currencies could be exposed, or say bank accounts could be frozen, or fear of policy disagreements that may lead to treasury market access restrictions. That triggered a shift toward gold as a “sanctions-proof” store of value or to say it directly “A Plan B mentality”.

3. US inflation / low real yields: With inflation elevated and real interest rates under pressure, the opportunity cost of holding non-yielding assets like gold falls. Also, the US dollar has wobble moments, making gold relatively attractive.

4. Safe-haven demand: In times of global uncertainty (e.g., pandemic, supply chain stress), investors turn to assets like gold. This adds incremental demand (including ways to “invest in gold ETF” or “gold mutual fund” vehicles).

5. Structural reserve shift: The view that the global financial order may be shifting (de-dollarisation, higher sovereign debt, fiscal deficits) also adds a narrative boost to gold’s case.

Thus, the current run-up is less about a short-term speculative spike and more about a combination of inflation, geopolitics, central-bank demand, and structural reserve diversification.

Historical Rally of Gold over the Last 50 Years

Looking back, 50 years gives important perspective on the gold price trends. For example:

• From 1970-1974 gold rose ~175% in that phase.
• From 1976-1980 gold recorded about a 208% rally.
• From 2001-2011 a ~514% rally occurred.
• From 2011-2015 ~ –0.21% fall due to global gold crash.
• From 2015-2020 ~ 84.7% another rally
• From 2020-2025 ~128.9% and again triple digit rally

These rallies lasted several years, and the reasons were similar: inflation spikes, currency weakness, oil-price shocks, geopolitical stress, low real interest rates.
The point: gold rallies tend to last multiple years (often 5-10 + years) rather than just a few months. But they also typically pause or correct at some point (Like the 2011-2015 period). History suggests don’t expect linear gains forever, but the structural forces may sustain the trend for a good while.

Way Forward for Gold

What lies ahead for gold? Here’s a balanced view:

• On the upside: With central-bank demand still running high, inflation sticky, geopolitical fault-lines numerous, gold retains its role as a portfolio diversifier and hedge. If equities stumble, or real yields fall further, gold may outperform. The report by World Gold council also highlighted how multiple countries have no plans to reduce their gold reserves.
• On the caution side: If growth around the globe revives sharply, real interest rates climb, and bond yields rise, gold’s relative attractiveness may decline. Further, supply/demand dynamics and investor sentiment can reverse momentum. For example, some articles caution that the current rally may be “too good to last.”

Practical implications for smart investors:

• You can “invest in gold ETF” or you may go for the “gold mutual fund” route for regulated liquid exposure rather than purely physical holdings.
• Recognize that gold is not an equity replacement; it has different return profile where when equity markets fall gold prices rises due to uncertainty in market.
• Consider gold as part of the allocation rather than as a main growth driver.
• Monitor macro factors: inflation, central-bank behaviour, real interest rates, dollar strength, geopolitical risk, all influence the “way forward” for gold.

The Golden advice

Whatever the case, remember the “Golden Portfolio Rule” for your “Gold investments”: You may have blended portfolio that can have gold mutual fund allocation in your portfolio and can consider keeping silver for tactical growth.

The reason: gold’s returns are inversely proportional (or at least non-correlated) with equities, so it smooths overall portfolio risk. During times when equities rally, gold may lag. But when equities falter, gold often holds up or even rises, so keeping it at ~10% ensures the portfolio stays balanced. Silver, on the other hand, can be used more opportunistically: when you believe a breakout is possible or industrial demand picks up, you can tilt smaller amounts into silver for upside.

If you seek a regulated, transparent vehicle for your gold exposure, explore the Axis Gold Fund which invests Axis gold ETF to capture those gold returns for your portfolio. This offers ease of trading, regulatory structure and cost-efficiency compared to physical holdings

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https://www.gold.org/goldhub/research/central-bank-gold-reserves-survey-2025

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