The Economic Survey anticipates a decline in gold prices and an increase in silver prices in the upcoming fiscal year. According to the World Bank’s Commodity Markets Outlook from last October, a 5% decrease in commodity prices is expected in 2025, followed by a 2% decrease in 2026.
This projected decline is primarily led by a decrease in oil prices, although prices for natural gas are expected to increase, and the outlook for metals and agricultural raw materials remains stable. In particular, the survey forecasts a decrease in prices for metals and minerals, driven by lower iron ore and zinc prices.
The decrease in commodity prices imported by India is seen as a positive factor for the domestic inflation outlook. Colin Shah, MD of Kama Jewelry, noted that the potential easing of inflation in the March quarter is likely to support lower gold prices. However, ongoing geopolitical tensions are a major concern, affecting fund flows and trade outlooks.
Shah expects that gold prices will remain high due to uncertainties and lower interest rates. In anticipation of the Budget, the bullion industry is hoping for a reduction in the import duty on gold from the current 6% to 3%.
Jateen Trivedi, VP Research Analyst at LKP Securities, mentioned that gold is trading at a premium of ₹250, with expectations of a potential cut in import duty. He predicts a gold price range of ₹80,500-₹83,000 per 10 grams, excluding any duty-related adjustments.
Sachin Jain, Regional CEO of India at the World Gold Council, highlighted the significance of the gold industry, contributing 1.3% to India’s GDP and employing millions of people. He emphasized that any increase in import duties in the upcoming Budget could have adverse effects, leading to higher domestic gold prices and encouraging smuggling.
Overall, the Economic Survey’s projections for gold and silver prices reflect a nuanced outlook for the commodities market, with various factors influencing price movements and industry dynamics.
