Motilal Oswal predicts Indian gold to hit Rs 1.35 lakh per 10 g, silver to surge to Rs 2.30 lakh/kg

When Motilal Oswal Financial Services Ltd released its October 18, 2025 report, the headline was impossible to miss: Indian gold could climb to Rs 1.35 lakh per 10 grams and global prices might touch $4,500 an ounce. The forecast was built by Manav Modi, analyst for commodities, and Navneet Damani, head of research at the same firm. The numbers matter because they hint at a very different investment landscape for Indian households as Diwali approaches on November 12, 2025.

Background: Gold’s 2025 Surge

Gold has been on a tear this year. International prices vaulted past the $4,000‑per‑ounce barrier in early July and have logged a 50 % year‑to‑date rise. In India, the metal touched Rs 1.20 lakh per 10 g in the week ending October 11, 2025, according to price tracker Goodreturns.in. That put the nation’s major cities – Mumbai, Delhi, Kolkata, Chennai, and Hyderabad – in the throes of a historic rally.

The surge isn’t a flash‑in‑the‑pan. The World Gold Council (WGC) reported 35 record‑highs between January and September, and central banks collectively bought almost 600 tonnes of bullion in the same window. Meanwhile, gold exchange‑traded funds (ETFs) attracted a net inflow of 450 tonnes – the strongest flow since the post‑pandemic rebound of 2020.

MOFSL Forecast and Methodology

The October report leaned on three data pillars: WGC mining statistics, Federal Reserve indicators, and Reserve Bank of India (RBI) currency trends. Reserve Bank of India kept the rupee relatively firm at 88.5 per dollar as of October 17, while the U.S. Dollar Index slipped below 100, hovering at 98.7 on October 15.

Using a base‑case USD‑INR conversion of 89, MOFSL modelled a long‑term price of Rs 1.35 lakh per 10 g. The firm also projected silver to rise to Rs 2.30 lakh per kilogram, up from the recent Rs 2.0 lakh/kg breach in Chennai and Hyderabad. The methodology assumed no major corrective shock before Diwali, with a near‑term resistance around $4,200/oz internationally and Rs 1.32 lakh per 10 g domestically.

Key Drivers Behind the Bullion Rally

• US fiscal anxiety: Persistent deficits have pushed investors toward safe‑haven assets.
• Fed rate‑cut expectations: Softening labour market data fuel hopes of earlier cuts, reducing the dollar’s allure.
• Asia’s demand engine: India’s physical gold imports surged 32 % YoY to 245 tonnes (Jan‑Sep 2025), while China is expanding its custodial role.
• Supply constraints: Mine output in South Africa and Australia is flat, ore grades are dropping, and tighter environmental rules curb new projects.
• Industrial tailwinds for silver: A rebound in photovoltaic and automotive sectors is adding a real‑economy boost to the metal.

Manav Modi summed it up in a press‑trust interview: “Gold’s stellar rally reflects a confluence of macro shifts, from fiscal uncertainty and a softer dollar to strategic diversification by central banks. Asia is emerging as the epicentre of this new monetary alignment.” Navneet Damani added, “Central bank diversification is redefining the bullion market. For the first time, institutional demand and sovereign accumulation are aligned with long‑term value creation.”

Market Reactions and Competing Forecasts

Not everyone agrees with the Rs 1.35 lakh target. Ventura Securities, another Mumbai‑based brokerage, pushed a more bullish scenario – Rs 1.5 lakh per 10 g by 2026 – citing even stronger demand from retail investors after the Dhanteras boom. CNBC TV18 quoted that view on October 18.

Still, MOFSL’s estimate remains the most cited in mainstream outlets like Times of India, Moneycontrol, and ABP Live. The consensus among the three major brokerage houses points to a “golden” window before the festive season, with analysts warning that a sudden policy shift in the U.S. could still trigger volatility.

Implications for Investors Ahead of Diwali

For the average Indian household, the timing is serendipitous. The Economic Times noted that buyers who purchased gold during Dhanteras 2024 enjoyed a 66.3 % return by Dhanteras 2025. With prices projected to sit near Rs 1.32 lakh by year‑end, the festive buying rush could lock in gains for many.

However, financial advisors caution against over‑exposure. “Treat gold as a hedge, not a speculative play,” says Rohit Sharma, senior manager at a Delhi‑based wealth‑management firm (not a primary entity, so no markup). Diversifying into silver, which is outperforming gold with a 60.2 % YTD gain, might smooth portfolio volatility.

What’s Next for Gold and Silver?

Looking ahead, the next potential flashpoint is the U.S. Federal Reserve’s policy meeting slated for early November. If rate cuts materialise, the dollar could weaken further, nudging bullion higher. Conversely, any surprise tightening would likely pull the metal back.

On the supply side, mining companies in Australia announced a $3.2 billion capex plan in September, aimed at boosting output by 2027. Whether that can offset the current shortfall remains to be seen.

In short, the bull market appears sturdy, but the usual caveats apply: geopolitical flare‑ups in the Black Sea or South China Sea could add another safe‑haven boost, while a sudden shift in U.S. fiscal policy could reverse the trend.