Gold prices remained a focal point in market discussions as India's Economic Survey 2025-26 explained the reasons for the remarkable surge and provided insights into the future of the precious metal in 2026. The survey emphasized that global uncertainty, a weak dollar, and investors seeking safe havens drove bullion to unprecedented levels last year, suggesting that this trend might continue this year.
The Economic Survey observed that the global price of gold increased from approximately $2,607 per ounce in 2025 to over $4,300 by the end of the year, and exceeded $5,100 in late January 2026. On India's Multi Commodity Exchange, spot prices more than doubled over the year up to late January, providing investors with returns exceeding 100 percent.
Chief Economic Advisor V Anantha Nageswaran noted that the decline of the US dollar, the anticipation of consistently low real interest rates, and increased geopolitical and financial risks were major factors influencing the trend. The survey also highlighted that central banks in various emerging markets, such as India, have increased their gold reserves, indicating a wider move towards diversifying reserves during uncertain periods.
The Survey predicted that prices might remain high as long as global tensions and uncertainties in economic policies persist. However, it warned that the rapid growth seen in 2025 might not continue indefinitely if geopolitical stability is restored or trade conflicts are resolved.
External market analysts expressed detailed opinions on future trends. Predictions from international organizations like the World Gold Council indicate that prices might increase further by 2026, with certain models predicting a rise of 15 to 30 percent from current levels, assuming continued safe-haven demand and consistent investments in gold-backed ETFs. However, some caution about potential volatility or corrections if yields increase, the dollar strengthens, or if investors return to riskier assets.
The domestic markets have shown a blend of sentiments. Bullion surged to new local peaks around Rs 1.8 lakh per 10 grams, yet some ETFs and exchange-traded products experienced profit-taking and short-term price declines. Traders and investors are now observing central bank policy signals, inflation data, and geopolitical events for indications on the future direction of price movements.
As foreign exchange reserves benefit from valuation increases in gold and import costs rise, policymakers are considering the broader economic effects of high gold prices on inflation and the trade balance. On Friday, gold prices dipped slightly from recent highs, while silver and other metals stayed high, highlighting the market's volatility.