Gold, silver prices to remain elevated amid global uncertainties: Economic Survey

Gold and silver prices are expected to remain at elevated levels amid persisting global uncertainties, unless a durable peace is established and trade wars are resolved, according to Economic Survey 2025-26.

The survey highlighted that both gold and silver touched lifetime highs during 2025, reflecting heightened global uncertainty and strong safe-haven demand. The rally was buoyed by a weakening US dollar, expectations of persistently negative real rates, and the market's growing assessment of geopolitical and financial tail risks.

"The prices of precious metals, both gold and silver, are likely to continue increasing due to their sustained demand as safe-haven investments amid global uncertainties, unless a durable peace is established and trade wars are resolved," said the survey tabled in Parliament.

On the Multi Commodity Exchange (MCX), silver futures crossed the record Rs 4 lakh per kg barrier on Thursday soaring by 6.3 per cent, while gold touched fresh all-time high of Rs 1.8 lakh per 10 grams. Some commentators feel that the torrid pace set by gold and silver in 2025 may not be sustained, it added.

Meanwhile, gold prices ended at Rs 1,39,201 per 10 grams, while silver closed at Rs 2,35,701 per kilogram recorded on December 31, 2025, on the MCX. In retail markets, gold and silver settled lower at Rs 1,37,700 per 10 grams and Rs 2,39,000 per kg in retail markets, recorded at the end of last year.

In FY25, India's import composition continues to be dominated by petroleum crude, gold and petroleum products, with these sectors accounting for over one-third of total imports. Gold imports increased by 27.4 per cent year-on-year (YoY) basis. The increase in gold imports may be attributed to a rise in gold prices, increasing by 38.2 per cent (YoY) and driven by strong domestic consumption, the survey said.

Meanwhile, foreign currency assets (FCA), which form the liquid core of reserves, softened slightly from USD 567.6 billion in end March 2025 to USD 560.5 billion as of 16 January 2026. In contrast, the gold component rose sharply to USD 117.5 billion as of 16 January 2026, compared with USD 78.2 billion at the end of March 2025, it added.

This increase reflects both valuation gains during a period of elevated global gold prices and a continued preference among central banks for diversifying into non-dollar reserve assets. The growing share of gold in reserves aligns with a broader international pattern where many emerging markets have increased gold holdings amid geopolitical uncertainty and shifts in the global interest-rate cycle, it said.

According to the survey, gold prices soared from USD 2,607 to USD 4,315 per ounce in 2025, marking one of the steepest annual gains in recent years. On the other hand, base metals, such as iron, copper, and aluminium, are expected to increase moderately. Copper is likely to keep its price elevated due to strong demand from green technology and data centres, coupled with supply disruptions.

However, the survey cited the World Bank's Commodity Prices Outlook, October 2025, which projected that global commodity prices are expected to decline by approximately 7 per cent in FY27, primarily driven by subdued crude oil prices amid oversupply. "Geopolitics may come in the way of this prediction," it said.