Gold prices jump nearly 1.5% this week; what’s driving the rally?

Gold rates (24 Karat) in India were marginally up on Friday at nearly ₹97,200 per 10 gram, 0.13% higher as compared to the closing price of ₹97,080 per 10 gram recorded on Thursday, according to India Bullions.

Gold futures on the Multi Commodity Exchange (MCX) were trading nearly 0.2% up at ₹96,980 per 10 gram on Friday after closing at ₹96,782 per 10 gram in the previous session.

On a weekly basis, gold prices (24 Karat) improved, rising by over 1.5% on Friday when compared to the closing price of ₹95,770 per 10 gram in the previous week, data by India Bullions showed. Gold futures also jumped approximately 1.58% this week after closing at ₹95,470 on Friday, June 27.

Gold rates have climbed over 26% in just this year due to many factors, including market volatility and geopolitical tensions. While gold has seen a fantastic run so far in 2025, the rally has seemed to slow down in recent times. However, gold is still on an upward trend, and many expect it to rise further in the coming months.

Why is gold rising?

Gold is a safe haven asset, which means that its prices jump during geopolitical tensions. When other investments turn risky due to market volatility and other concerns, investors shift towards gold to seek more stable returns.

In 2025, geopolitical dynamics have fuelled gold’s bull run. US President Donald Trump’s tariff concerns and conflicts between Israel and Palestine, as well as between Israel and Iran, among other geopolitical tensions, have led to a rise in gold prices.

The fiscal concerns due to the passing of Trump’s tax-cut and spending bill in Congress are aiding gold’s rising trajectory. Further, Trump’s confirmation on tariff letters rolling out on Friday has added to the uncertainty, boosting gold prices even more. Tariffs can weaken the dollar, potentially leading to higher gold prices, media reports noted.

Investors are consistently seeking refuge in gold as a safe haven, especially during the current period of economic and geopolitical uncertainty.