Economic Survey 2025-26 Forecasts Sustained High Prices for Gold and Silver
The Economic Survey 2025-26, tabled in Parliament, has projected that gold and silver prices are likely to remain elevated in the near term unless global geopolitical tensions ease and ongoing trade wars are resolved. The survey attributes this outlook to persistent safe-haven demand amid heightened uncertainty in international markets.
Record Highs Driven by Multiple Factors
According to the survey, both precious metals touched lifetime highs in 2025, driven by a combination of factors:
- A weakening US dollar
- Expectations of persistently negative real interest rates
- Rising geopolitical and financial tail risks
The report states, "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."
Indian Market Performance and Import Trends
On the Multi Commodity Exchange (MCX), silver futures crossed the record Rs 4 lakh per kg mark recently, surging 6.3 per cent, while gold touched a fresh all-time high of Rs 1.8 lakh per 10 grams. At the end of December 2025, gold prices on MCX stood at Rs 1,39,201 per 10 grams, with silver closing at Rs 2,35,701 per kg. In retail markets, gold and silver settled at Rs 1,37,700 per 10 grams and Rs 2,39,000 per kg, respectively.
The survey highlighted that in FY25, India's import basket continued to be dominated by petroleum crude, gold, and petroleum products, which together accounted for over one-third of total imports. Notably, gold imports rose 27.4 per cent year-on-year, largely reflecting a 38.2 per cent increase in gold prices amid strong domestic consumption.
Reserve Bank's Gold Holdings and Global Trends
On the external sector, the survey noted that foreign currency assets — the liquid core of India's forex reserves — softened marginally from USD 567.6 billion at end-March 2025 to USD 560.5 billion as of January 16, 2026. In contrast, the gold component of reserves rose sharply to USD 117.5 billion, compared with USD 78.2 billion at end-March 2025.
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 survey added that this trend mirrors a broader global shift among emerging markets.
Price Movements and Commodity Outlook
According to the survey, gold prices surged from USD 2,607 to USD 4,315 per ounce during 2025, marking one of the steepest annual gains in recent years. However, the survey also cautioned that some market participants believe the sharp rally witnessed in 2025 may not be sustained over the longer term.
For other commodities, base metals such as iron, copper, and aluminium are expected to rise more moderately. Copper prices, in particular, are likely to remain elevated due to strong demand from green technologies and data centres, coupled with supply disruptions.
Global Commodity Price Projections
Citing the World Bank's Commodity Prices Outlook (October 2025), the survey said global commodity prices are projected to decline by about 7 per cent in FY27, mainly due to subdued crude oil prices amid oversupply. However, it cautioned that geopolitical developments could derail this outlook, underscoring the ongoing volatility in international markets.
