Gold outlook: Safe haven demand for precious metals remains strong amid Fed cuts and geopolitical uncertainty; what’s next?

Gold and silver have managed to remain the center of investor focus in 2025, surpassing lifetime highs one after another and delivering massive returns to investors.

While bullion prices eased on Friday, October 3, as investors booked profits amid uncertainty over the US government shutdown and Federal Reserve policy outlook, gold and silver are expected to continue to attract investor interest in the future, according to the latest insights by Tata Mutual Fund.

Gold and Silver outlook: Key insights

Here are some key insights on gold and silver outlook as per Tata Mutual Fund:

Between January 2008 and August 2011, gold prices soared nearly 100%. From January 2025 to August 2025, gold prices have jumped almost 53%.

• Gold prices are expected to consolidate in the $3,500–$4,000/oz range in the short term or in the near future. This is on the back of US tariff policy changes, heightened geopolitical risks and elevated US growth concerns. “Investors may remain invested and look for accumulation on any decline in the prices triggered by short-term cyclical factors,” Tata MF stated.

• The overall market environment is expected to be favourable for strategic gold buying, as gold has considerable value as a hedge against inflation, geopolitical uncertainty and currency depreciation over the long run.

• Central bank gold buying has almost doubled in the last 10 years. This is one of the major factors driving gold’s demand and prices up this year.

• The 25 basis points rate cut announced by the US Federal Reserve in September boosted gold prices further. The expectations of another 25 bps rate cut, especially if the labour market continues to remain weak, are also aiding gold’s bull run. “Fed rate cuts generally contribute to dollar depreciation, which in turn supports higher demand and prices for Gold,” it said.

• While the demand for Indian jewellery is expected to soften, due to soaring gold prices, investment demand is consistently on the rise.

• Rupee depreciation is also amplifying gold. When the rupee gets weaker, gold prices rise domestically because of the increase in local demand. “About 86% of Gold is imported into India despite the high import duty. When INR falls against USD, Gold becomes costlier domestically, amplifying local demand. Hence, favoring the rise in Gold prices,” it said.

• Silver has put up one of the most spectacular performances in decades, rising by nearly 61% by late September.

• Strong investment demand and supply deficit, along with Fed cuts, are expected to support silver prices over the medium to long term for a three to five-year range.

• Silver could outperform gold in the medium term with a favourable gold/silver ratio, recovery in developed economies and increased industrial demand for the white metal, aided by global supply deficit projections. “Silver is a developing growth story, and the trend is highly dependent on a broad recovery in industrial demand. Investors should be mindful of short-term volatility and macro headwinds,” it said.

• The industrial demand for silver has exploded in recent times, especially from China, highly influencing white metal prices.

• US Fed rate cuts lead to dollar depreciation, which then results in an increased demand for silver and higher prices.

• There has been a supply deficit of silver for 5 straight years now, which is a big boost for overall market sentiment, Tata MF said.

• Nearly 92% of India’s silver demand is met through imports, which is why rupee depreciation aids silver demand and prices domestically.

“As incremental flows come to the gold and silver, investors may consider allocating Gold and Silver in a 50:50 ratio as Silver too looks attractive and Gold as a strategic asset,” Tata Mutual Fund said.

RBI Governor Sanjay Malhotra, on Friday, said that gold prices are acting as a new barometer reflecting global uncertainties, just like crude oil used to be in the recent past.

"Despite geopolitical tensions that would have sent oil prices soaring in an earlier decade, they (oil prices) have been very range-bound. This could be due to a decline in oil intensity in GDP, not just in India, but across the world. Perhaps gold prices now are showing the kind of movement that oil used to, that is, acting as a barometer of global uncertainty," the RBI Governor said at the Kautilya Economic Conclave 2025.

Current gold, silver prices

Gold prices fell by ₹500 to ₹1,20,600 per 10 gram in Delhi on Friday, snapping a five-day record rally, as per the All India Sarafa Association data.

Silver rates in Delhi fell by ₹500 to ₹1,50,000 per kg on Friday, October 3.

In the overseas markets, spot gold slipped to $3,863.51 per ounce, while spot silver rose 1% to $47.34 per ounce on Friday.

Latest record highs

On Wednesday, October 1, gold futures for the December delivery were at their all-time high of ₹1,18,444 per 10 gram on the Multi Commodity Exchange (MCX). Silver futures for the December expiry hit a peak of ₹1,45,715 per kg on Wednesday.

Gold prices (99.9% purity, 24K) in Delhi were at a lifetime high of ₹1,21,100 per 10 gram on October 1, while Silver was at a peak of ₹1,50,500 per kg.