Gold prices hold firm above $4,100 as dollar weakens, safe-haven demand stays strong; what lies ahead

Gold continues to gleam brightly in global markets as a preferred safe-haven asset, underpinned by geopolitical turmoil, a softer US dollar, and steady institutional buying. According to a new report by Emkay Wealth Management, the yellow metal remains on firm technical footing, with potential upside targets pegged at US$4,368 and US$4,600 per ounce, while key support levels are seen near US$3,890 and US$3,510.

After rallying to $4,368 in October — its highest in months — gold saw a mild pullback to below $4,000 by the end of the month, partly due to a 1.4% rise in the US dollar. Despite this correction, analysts at Emkay believe the long-term trend remains upward, supported by persistent central bank purchases and robust institutional interest.

“The geopolitical issues that have persisted in Eastern Europe and the Middle East have led investors to seek safety in gold,” Emkay noted. “The US dollar’s 8% depreciation over the past year has also supported a broad rally in commodities, including precious metals.”

Minor up and down

On Wednesday, gold prices slipped slightly amid profit-taking and a rebound in the US dollar following a strong three-week rally. The dip comes after markets priced in expectations of a possible rate cut by the US Federal Reserve as early as next month.

In India, 24-karat gold traded at Rs 12,551 per gram, 22-karat at Rs 11,505, and 18-karat at RS 9,413, according to the India Bullion & Jewellers Association. Silver was priced at Rs 160.10 per gram, or about Rs 1.60 lakh per kilogram.

Globally, spot gold fell 0.5% to $4,107.41 per ounce, while US gold futures eased 0.1% to $4,113.80 as of early Wednesday. Yet, the metal remains comfortably above $4,100 — a level it last held in late October.

Institutional and central bank buying spree

A key source of gold’s resilience is the surge in exchange-traded fund (ETF) inflows, which have reached $65 billion so far in 2025, with $20 billion added in the last quarter alone. Central banks have also stepped up their purchases, diversifying away from the US dollar amid global fiscal and geopolitical uncertainty.

“This renewed accumulation reflects a structural shift in asset allocation,” Emkay observed. “Global institutions and sovereign entities are seeking alternatives to US Treasuries and the dollar amid concerns over prolonged fiscal imbalances, currency debasement, and geopolitical fragmentation.”

Safe-haven appeal

The ongoing conflicts in Ukraine and the Middle East, alongside concerns about slowing global growth and sticky inflation, have revived gold’s role as a store of value and volatility hedge. With inflation still running above target levels in many economies, real interest rates may remain low or negative, strengthening the case for holding gold.

Strategic outlook

Emkay’s analysis suggests gold may consolidate near $4,000 before attempting another upward move. Upside targets of $4,368 and $4,600 are viewed as key breakout zones, while $3,890 and $3,510 represent attractive accumulation levels for long-term investors. The firm advises investors to “hold existing positions and add on dips”, citing resilient fundamentals and strong institutional support.

Why gold’s rally may stay

Gold’s rally appears poised to sustain momentum amid a confluence of supportive macro factors. The US dollar’s 8% decline over the past year has enhanced gold’s attractiveness for non-dollar investors, while stubborn inflation continues to underscore its role as a reliable hedge against price pressures. At the same time, emerging market central banks are diversifying their reserves away from dollar-denominated assets, further strengthening demand.

Record ETF inflows of $65 billion in 2025 reflect growing institutional confidence in gold as a strategic asset. Adding to this, persistent geopolitical tensions have kept safe-haven demand elevated, ensuring that gold remains a cornerstone of stability in a volatile global environment.

Investor takeaway

Financial planners recommend allocating 10–15% of portfolios to gold through ETFs, sovereign gold bonds (SGBs), or physical bullion. For those already invested, maintaining positions through volatility could be rewarding. For new investors, temporary dips below US$4,000 may offer attractive entry points.

With support levels established and institutional demand showing no sign of slowing, gold’s glow looks set to endure well into 2026 — reaffirming its position as one of the most dependable assets in uncertain times.