Motilal Oswal Financial Services Ltd. sees festive resilience and structural strength driving the next leg higher in Gold & Silver.
Mumbai, 16th October 2025: Gold’s dazzling rally in 2025 has captivated global markets — a rare and spectacular ascent that has seen prices surge over 50% year-to-date, breaching $4,000 on COMEX and touching ₹1,20,000 domestically.

The metal has clocked over 35 new record highs this year, as investors embrace tangible assets amid global uncertainty. Silver too has mirrored gold’s brilliance, soaring over 60% YTD across exchanges.
What began as a cautious start to the year has turned into a full-fledged super cycle, driven by capital rotation from bonds and riskier assets into safe havens. The question now — is this a fleeting blaze, or the dawn of a new financial order?
Macro Factors Fueling the Rally
The rally in precious metals has been underpinned by a steady dollar index below 100 and rupee appreciation, both of which have supported domestic prices. Markets are now pricing in a 70% probability of U.S. Federal Reserve rate cuts in October and December, amid weaker U.S. labor data and rising fiscal concerns.
Political uncertainty in Japan following the election of fiscal dove Sanae Takaichi has added to global safe-haven demand, while China’s bid to become a global gold custodian is bolstering structural support.
Mr. Manav Modi, Analyst, Commodities & Currencies, Motilal Oswal Financial Services Ltd., said:
“Gold’s stellar rally reflects a confluence of macro shifts — from fiscal uncertainty and softer dollar to strategic diversification by central banks. Asia is emerging as the epicenter of this new monetary alignment.”
Global Supply and Demand Dynamics
Global mine output has stayed largely static in 2025, constrained by ore-grade decline, environmental regulations, and rising operational costs. Recycling has increased modestly but remains below past bull-market levels.
Demand, however, has been robust — led by China, India, Turkey, and the Middle East, where currency weakness and inflation have driven record safe-haven buying.
- Global Gold ETF holdings: +450 tonnes (strongest inflow since 2020)
- Central bank purchases: +600 tonnes (first nine months of 2025)
- India imports: 300 tonnes of gold and 3,000 tonnes of silver by Q3 2025
Mr. Navneet Damani, Head of Research – Commodities & Currencies, Motilal Oswal Financial Services Ltd., added:“Central bank diversification is redefining the bullion market. For the first time, institutional demand and sovereign accumulation are aligned with long-term value creation.”
A Historical Perspective: Asia Leads the Rally
Gold’s 2025 surge ranks among the steepest since the 1970s, rivaling the bull runs of 1979–80, 2010–11, and 2020. Unlike earlier cycles driven by Western crises, this rally is Asia-led, underpinned by reserve diversification and official-sector demand.
Silver’s Distinct Story
Silver’s resurgence stands apart from past speculative spikes. The gold-silver ratio, which peaked near 110 earlier this year, has now narrowed to 81–82, returning to pre-pandemic levels.
Unlike the volatile rallies of 1980 or 2011, this uptrend is structurally supported by demand from solar, EV, and AI industries, combined with constrained mine supply — a shift toward tangible assets rather than a fleeting bubble.
Global silver supply has failed to keep pace with demand for several years, leading to a structural market deficit, which is forecast to continue for a fifth consecutive year in 2025. This structural shortfall creates a unique floor for prices.
Currently, this acute shortage in Silver has disrupted the parity as well premiums in the market, creating some unique opportunities and also supporting the overall sentiment.
Diwali and Seasonal Strength
As Diwali approaches, seasonal patterns once again favor gold. Historically, prices in India have risen in seven of the past ten Diwali seasons, with pre-Diwali gains often outpacing post-festival trends. Despite record-high prices, domestic demand remains resilient, supported by cultural sentiment and investor optimism.
Outlook: Gold’s Renewed Role in a Shifting Financial Order
The outlook for gold remains constructive amid policy uncertainty, slower growth, and persistent geopolitical risks. While short-term corrections are possible after the recent rally, the underlying supports — strong central bank buying, ETF inflows, and currency diversification — remain intact.
Motilal Oswal’s targets:
- Gold: COMEX $4,250–$4,500 | Domestic ₹1,28,500–₹1,35,000 (assuming USDINR at 89)
- Silver: COMEX $75 | Domestic ₹2,30,000 (assuming USDINR at 89)
Commenting on the outlook, Mr. Manav Modi, Analyst, and Mr. Navneet Damani, Head of Research – Commodities & Currencies, Motilal Oswal Financial Services Ltd., said:
“We have achieved our target for Gold on both COMEX and the domestic front at $4,000 and ₹1,20,000 respectively. While bouts of correction may emerge, persistence above the all-time highs could take prices towards $4,250–$4,500 on COMEX and, assuming USDINR at 89, ₹1,28,500–₹1,35,000 on the domestic front from a medium- to long-term perspective.
Similarly, for Silver, we have achieved our domestic and COMEX target of ₹1,50,000 and $50. Sustained momentum above the all-time highs could extend this rally towards $75 on COMEX and ₹2, 30,000 domestically, assuming USDINR at 89, from a long term perspective.”
About Motilal Oswal Financial Services Limited
MOFSL is a financial services company. Its offerings include Wealth Management, Capital Markets (Institutional broking & Investment banking), Asset & Wealth Management (Asset Management, Private Equity & Wealth Management), Housing Finance & Equity based treasury investments. MOFSL employs 13,250+ employees serving to 13.6 mn+ clients via distribution reach in 550+ cities. MOFSL has Assets Under Advice (AUA) of Rs. ~6.5 Lakh Crs.
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