New Delhi [India], July 5 : Local gold prices in the country are expected to maintain an upside bias in the second half of 2025, potentially moving from the current range of Rs 96,500-Rs 98,500 per 10 grams toward the psychologically significant Rs 1,00,000 mark, according to a report by ICICI Bank Global Markets.
Contrary to the global trend, domestic gold prices grew by 0.6 per cent in June, driven by a mild INR depreciation of 0.2 per cent.
"Local gold prices are expected to continue trading with an upside bias moving from a near-term range of Rs 96,500 to Rs 98,500 per ten grams to Rs 98,500 per ten grams to the Rs 100,000 per ten grams range in H22025," the report added.
In volume terms, gold imports have fallen on a sequential basis, showing that demand is weakening in response to elevated prices. Gold imports of USD 2.5bn were recorded in May compared to USD 3.1bn in the previous month. Investment demand was strong in May.
Data released by the AMFI showed a net ETF inflow of Rs 2.92 billion in May, after two consecutive months of outflows, highlighting the robust investment-related demand for the yellow metal in the local markets.
On the global front, despite the sequential fall in gold prices, investment demand for the yellow metal remained strong, which is evident from ETF flows as well.
The SPDR ETF flows in gold increased from 930 tonnes as of 1st June 2025 to 948 tonnes as of 1st July 2025. At the same time, speculative net long positions rose by roughly 13k lots in the last month.
In recent months, the gold bull run appears to have stalled as prices have been flat over the last month, reflecting an easing in safe-haven demand that has taken place, even as they remain higher on a YTD basis in 2025 by 28 per cent.
A critical development was the ceasefire reached between Israel and Iran that improved risk sentiment and reduced demand for the yellow metal. At the same time, markets are positioning for the US government to agree on trade deals with other countries that will limit the need for reciprocal tariffs to be implemented, the report added.
The US has already agreed deals with the UK and Vietnam, while there has been considerable progress made in negotiations with other countries such as Japan, India and the EU.
Besides, the US and China have agreed upon a framework for a trade deal as well that will be concluded presumably by August.
"The upshot is that the easing in geopolitical tensions and expectations that trade-war 2.0 could ease in magnitude have worked to limit further sharp upside emerging in gold prices," the report added.
The report further stated that investment-related demand has continued to drive gold prices as jewellery demand has witnessed softness.
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