Topic 4: BULLION: SHINING SHELTER

In March 2025, the bullion market, particularly gold, witnessed a mixed yet largely positive performance influenced by global economic conditions, geopolitical tensions, and domestic factors. Gold prices in international markets peaked at $3,168.6 per ounce on March 20. In the Indian market, 24K gold rose to a monthly high of ₹9,066 per gram on the same date, marking a notable increase from the monthly low of ₹8,662 on March 1. Throughout the month, domestic gold prices exhibited an upward trend, though fluctuations occurred due to global price movements and changing local demand patterns. Silver also followed a positive trajectory in the domestic market, with noticeable gains, especially around March 24, reflecting renewed investor interest in precious metals amid uncertain economic conditions. Gold’s appeal as a safe-haven asset was strengthened by heightened geopolitical risks and trade tensions, particularly the U.S. tariffs on several countries. These developments raised concerns over global economic stability, leading investors to shift towards more secure assets like gold. Additionally, expectations of interest rate cuts by major central banks, especially the U.S. Federal Reserve, further supported gold prices by lowering the opportunity cost of holding non-yielding assets. A weakening U.S. dollar during the month also contributed to gold’s rally, as gold becomes more attractive to investors holding other currencies. Investment demand remained robust, with gold ETFs seeing significant inflows—$9.4 billion in February alone—signalling strong institutional interest. Central banks continued adding gold to their reserves, further reinforcing its long-term value. Moreover, inflationary concerns driven by tariffs and macroeconomic uncertainty added to gold’s attractiveness as an inflation hedge. These combined factors resulted in a strong performance for bullion in March, with investor sentiment expected to remain bullish in the near term.



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