The Economic Survey 2025‑26 explains why gold prices hit record highs in 2025 and whether the rally can continue. It highlights global uncertainty, US tariffs, and weakening dollar as key drivers, while noting risks for 2026.
Gold’s record‑breaking rally in 2025 has been analyzed in the Economic Survey 2025‑26, which details the reasons behind the surge and evaluates whether the momentum can continue into 2026. Chief Economic Advisor V Anantha Nageswaran attributed the unprecedented rise to US tariff announcements, global policy uncertainty, and a weakening dollar.
Despite the strong backdrop, spot gold prices on the Multi Commodity Exchange of India fell 4.87 percent on January 30, 2026, slipping from ₹1,75,231 to ₹1,67,095. Several leading gold exchange‑traded funds also dropped by at least 10 percent, raising questions about the sustainability of the rally.
The survey noted that gold prices jumped from $2,607 to $4,315 per ounce in 2025, before climbing further to $5,101.34 per ounce by January 26, 2026. On the MCX, gold rose from ₹81,028 in January 2025 to ₹1,75,231 in January 2026, delivering investors returns of more than 100 percent in a single year.
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The report explained that the surge reflected expectations of persistently negative real rates and growing concerns about geopolitical and financial risks. Global policy uncertainty following US tariff announcements pushed investors away from the dollar and into safe‑haven assets like gold.
The Economic Survey highlighted the impact on India’s reserves, with the gold component rising sharply to $117.5 billion by January 16, 2026, compared to $78.2 billion in March 2025. This reflected valuation gains and a preference among central banks to diversify away from dollar assets. Foreign Currency Assets softened slightly, while Special Drawing Rights remained stable.
India’s import composition continues to be dominated by petroleum crude, gold and petroleum products, accounting for over one‑third of total imports. Gold imports rose 27.4 percent year‑on‑year, driven by strong domestic consumption and a 38.2 percent rise in prices. Loans against gold jewellery also surged 125.3 percent, underscoring the impact of rising valuations.
Looking ahead, the survey forecasts that precious metals may continue to rise due to safe‑haven demand amid global uncertainties. However, it cautions that if the torrid pace of 2025 is not sustained, core inflation excluding precious metals could be higher.
The outlook for 2026 remains tied to geopolitical stability, trade disputes, and monetary policy. While risks persist, the Economic Survey suggests gold and silver will retain their appeal as defensive assets unless lasting peace and resolution of trade wars alter investor sentiment.
