Gold and silver prices are expected to remain at elevated levels amid persisting global uncertainties, unless 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 durable peace is established and trade wars are resolved," said the survey tabled in Parliament. Some commentators feel that the torrid pace set by gold and silver in 2025 may not be sustained, it said.
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 on 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 January 16. In contrast, the gold component rose sharply to USD 117.5 billion, as of January 16 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 like 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 of 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.
Also read: ‘Bottom 5-10 per cent record sharpest rise in consumption’
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