Will Gold Prices Rise Further in 2026? Survey Breaks It Down

The Economic Survey 2025–26, presented by Chief Economic Advisor V Anantha Nageswaran, highlights why gold prices touched historic highs in 2025. Key triggers included tariff announcements by the US government, rising global policy uncertainty and sustained weakness in the US dollar, all of which boosted demand for safe-haven assets like gold.

Gold Prices Dip Despite Bullish Long-Term Outlook

Interestingly, even as the Economic Survey flagged strong fundamentals, spot gold prices on India’s Multi Commodity Exchange (MCX) slipped 4.87% on January 30, 2026, falling from ₹1,75,231 to ₹1,67,095. Several gold ETFs, including Axis Gold ETF, Union Gold ETF and 360 One Gold ETF, also declined by over 10%.

Why Gold Prices Soared to Record Levels in 2025

According to the Economic Survey, international gold prices jumped sharply from $2,607 per ounce to $4,315 per ounce in 2025. By January 26, 2026, gold had climbed further to $5,101.34 per ounce, reflecting sustained investor anxiety over global economic and geopolitical risks.

Weak Dollar and Global Risks Fuelled Gold Demand

The survey attributes the rally to a weakening US dollar, expectations of persistently negative real interest rates, and rising concerns over geopolitical tensions and financial tail risks, which pushed investors towards gold as a hedge.

MCX Gold Delivered Over 100% Returns in a Year

On the domestic front, MCX spot gold prices rose sharply from ₹81,028 on January 30, 2025, to ₹1,67,095 by January 29, 2026. This translated into an impressive annual return of over 106% for investors, making gold one of the top-performing assets of the year.

Gold Imports Rise Despite Higher Prices

Naveen Mathur, Director – Commodities, Currencies and GIFT IFSC at Anand Rathi Shares & Stock Brokers, noted that India’s gold import bill in 2025 stood at around $59 billion—only marginally higher than 2024—despite a price rise of over 60%. This was largely due to a more than 20% drop in import volumes.

Gold Import Volumes May Stay Muted in 2026

Mathur added that while gold imports may remain elevated in value terms in 2026 due to high prices, import volumes are expected to stay relatively subdued compared to 2025, reflecting price-sensitive demand.

US Tariff Announcements Boosted Safe-Haven Buying

The Economic Survey highlighted that global financial markets reacted sharply to US tariff announcements in the first half of calendar year 2025. The resulting spike in policy uncertainty led investors to cut exposure to the US dollar and shift funds into gold.

Emerging Markets Increase Gold Holdings

The survey also pointed out that emerging economies are steadily increasing the share of gold in their foreign exchange reserves. This trend reflects a broader global shift towards diversifying away from dollar-denominated assets amid changing interest rate cycles.

Gold Component of India’s Forex Reserves Surges

While India’s Foreign Currency Assets (FCA) dipped slightly to $560.5 billion as of January 16, 2026, the gold component rose sharply to $117.5 billion, up from $78.2 billion in March 2025. The survey said this jump was driven by valuation gains and central banks’ preference for non-dollar assets.

Rising Gold Prices Push Up Import Bill

The Economic Survey noted that petroleum crude, gold and petroleum products together accounted for over one-third of India’s total imports in FY25. Gold imports alone rose 27.4% year-on-year, mainly due to a 38.2% jump in prices and strong domestic demand.

Loans Against Gold See Sharp Increase

Another impact of higher gold prices was a surge in loans against gold jewellery. The survey reported a massive 125.3% year-on-year rise in such loans, indicating households leveraging higher gold valuations for liquidity.

Will Gold and Silver Rally Continue in 2026?

Looking ahead, the Economic Survey expects gold and silver prices to remain supported due to their continued appeal as safe-haven assets. However, it cautioned that a sustained rally would depend on global peace, easing geopolitical tensions and resolution of trade wars.

Some Analysts See Rally Losing Steam

The survey also acknowledged that some market experts believe the sharp pace of gains seen in 2025 may not continue. If that view holds, core inflation excluding precious metals could remain higher, rather than easing.