Gold Prices May Soar to $3,839 per Ounce by Diwali, Says World Gold Council

Mumbai – In a bullish scenario, global gold prices are projected to rise by 15% from current levels and may touch $3,839 per ounce by Diwali and the end of December, according to estimates by the World Gold Council (WGC). If this target is achieved, investors could earn approximately 40% returns on gold by the end of the year.

WGC sources stated that if global economic and financial conditions deteriorate further and geopolitical tensions escalate, demand for gold as a safe-haven asset is likely to increase. This could push gold prices 10% to 15% higher from their current levels.

Under normal market conditions, gold prices have remained range-bound over the past six months and may fluctuate between 0% and 5% by year-end, potentially offering annualized returns of 25% to 30%.

Due to persistent geopolitical and economic uncertainties, investors may remain cautious during the second half of 2025. Although recent inflation data from the U.S. points toward potential improvements, concerns remain that the situation could worsen rapidly. Additionally, pressure related to the U.S. dollar is expected to persist.

Overall, the current macro environment continues to remain positive for gold. However, the ongoing rally in equity markets could limit investments in gold, the WGC noted.

In a recessionary scenario, gold prices could see a correction of 12% to 17%, possibly leading to low double-digit or even single-digit returns by year-end.

During the first half of 2025, gold prices have already increased by 26% in USD terms, and delivered double-digit returns across various currencies. Weakness in the U.S. dollar and rising geopolitical instability have contributed to renewed interest in gold.

Strong demand from global central banks and gold ETFs has significantly supported prices. In fact, the average daily trading volume in gold reached $329 billion in the first half of 2025 – the highest for any first half in history.

Across all major regions, inflows into gold ETFs have surged, boosting overall gold demand. According to WGC data, the total AUM (Assets Under Management) of global gold ETFs rose by 41%, reaching $383 billion in the first half of the calendar year. Total ETF holdings also increased by 396 tonnes, reaching 3,615 tonnes.