Investment 2025: 8% in gold, 10-15% in silver, here's what analysts say about asset allocation in new year

In any year, investment in gold and silver always draws your attention. As we near the new year 2025, gold and silver remain top investment options amidst the persistent global economic and political uncertainty. The continuous gold purchases by central banks, notably China, along with anticipated rate reductions by the Federal Reserve, point towards a positive trajectory for gold in the near future. 

Gold prices experienced a sharp increase to a two-week peak on Wednesday (December 11) due to escalating geopolitical tensions and market anticipation of a forthcoming rate cut by the US Federal Reserve.

In India, gold rates also saw a notable uptick. The price of 24-carat gold surged by Rs 820 to reach Rs 7,878.3 per gram, while 22-carat gold saw a rise of Rs 750, now priced at Rs 7,223.3 per gram. Throughout 2024, gold demonstrated a substantial return of 20.8%, achieving a record high of Rs 79,700.

Gold outlook in 2025

In 2024, gold experienced a remarkable 20.8% return, reaching Rs 79,700. According to analysts at Stoxkart, the yellow metal is forecasted to see additional growth of 15-18% in 2025. With immediate support levels at Rs 68,500-Rs 65,000, there is upward potential expected to range from Rs 88,500 to Rs 92,000. Pranay Aggarwal, CEO, Stoxkart, said that the yellow metal may see further gains of 15-18% in 2025. 

Gold's global outlook

According to Heraeus Precious Metals, gold's record-breaking streak could continue into 2025. This projection is based on anticipated interest rate cuts by major central banks and the likelihood of a weaker dollar, both of which are expected to increase demand for the precious metal as a safe-haven asset. The company expects gold prices to fluctuate between $2,450 and $2,950 per ounce in 2025, influenced by ongoing purchases by major central banks, albeit at a reduced rate compared to 2024, as well as geopolitical uncertainties in regions such as Ukraine and the Middle East.

Gold is commonly sought after as a reliable store of value during times of economic and political instability. The metal tends to appreciate when interest rates are low, as this reduces the opportunity cost of holding an asset that doesn't produce yields. Heraeus Precious Metals also noted that if economic stimulus measures implemented by the Chinese government result in economic growth, countries like China and India could significantly contribute to gold demand in 2025, as stated in a report published by Reuters.

Silver outlook in 2025

The demand for silver is anticipated to experience substantial growth as the focus shifts towards sustainable energy, particularly in the development of electric vehicle (EV) infrastructure. It is predicted that there will be immediate support within the range of Rs 78,000 to Rs 82,000, with the potential to increase to Rs 1,12,000 to Rs 1,16,000.

According to a World Bank report, silver prices are expected to rise by 7% in 2025 and an additional 3% in 2026, following a 20% increase this year. This forecast is based on the assumption that supply growth will not keep pace with strong demand trends.

Asset allocation in 2025

As per analysts considering fundamentals and technical indicators, it is recommended that investors allocate 5-8% of their portfolio to gold and 10-15% to silver, taking into consideration their risk tolerance and investment timeline. Both metals serve as a reliable store of value, offering protection against geopolitical uncertainties, inflation, and fluctuations in the stock market. Given the promising outlook for both gold and silver, their outperformance in volatile market conditions is anticipated to persist through 2025.