Gold has shattered every historical record, breaching Rs 90,000 per 10 grams in India and $3,050 per ounce internationally. The rally has accelerated in March 2026 as US tariff uncertainty drives a global flight to safety. Can gold really reach Rs 1 lakh? Let’s examine the drivers.
What’s Driving Gold to Record Highs
1. Central Bank Buying: The Structural Shift
Central banks bought 1,037 tonnes of gold in 2025 — the third consecutive year above 1,000 tonnes. China’s PBOC (225 tonnes), India’s RBI (72 tonnes), Poland (90 tonnes), and Turkey (75 tonnes) were the biggest buyers. This represents a fundamental shift in reserve management away from US Treasuries, accelerated by the freezing of Russian reserves in 2022.
2. Tariff-Driven Safe Haven Demand
The uncertainty surrounding Trump’s reciprocal tariffs has created a “fear premium” in gold. Historically, trade wars are bullish for gold — during the 2018-19 US-China trade war, gold rallied 25%. The current trade conflict is broader, involving multiple countries simultaneously.
3. US Fiscal Concerns
US national debt has crossed $37.8 trillion, with annual interest payments exceeding $1.2 trillion. The Congressional Budget Office projects debt-to-GDP reaching 120% by 2030. Gold benefits as investors question the long-term sustainability of dollar-denominated debt.
Can Gold Reach Rs 1 Lakh?
At current exchange rates, $3,300/oz translates to approximately Rs 1,00,000 per 10 grams. Goldman Sachs recently raised their gold target to $3,300, while Bank of America sees $3,500 as possible if tariffs escalate. So Rs 1 lakh gold is not a question of “if” but “when” — likely by late 2026.
How to Invest
- Sovereign Gold Bonds (SGBs): Best option but new issuances have been paused since February 2024. Buy existing SGBs on the secondary market (NSE/BSE) at slight premiums
- Gold ETFs: SBI Gold ETF, HDFC Gold ETF, Nippon Gold BeES — highly liquid with low expense ratios (0.5-0.6%)
- Gold Savings Funds: If you don’t have a demat account, invest via gold mutual funds through any AMC app
- Avoid physical gold: Making charges (8-25%), purity concerns, and storage risk make physical gold the worst investment vehicle
Allocation: 10-15% of portfolio. If you have zero gold exposure, start with 5% and add 2-3% on dips toward Rs 85,000.