Gold worth has been reaching new heights pushed by geo-political tensions, financial uncertainty, and a weakening US greenback, stated the report titled ‘Coming Of (A Turbulent) Age: The Nice World Gold Rush' by the State Financial institution of India's Financial Analysis Division.
The year-to-date worth has elevated by over 50 per cent in 2025. The worth got here all the way down to beneath USD 4,000 per ounce for a number of days in October, however once more moved above USD 4,000/oz in November.
The report famous that the home provide of gold is simply a fraction of the entire gold provide in India, with imports contributing round 86 per cent of the entire provide in 2024 as per the World Gold Council estimate.
India is among the largest gold markets, influenced by cultural affinity for shiny metallic, funding demand and different financial elements, together with a hedge towards inflation and a safe-haven asset, it famous.
Complete client demand for gold in India elevated to 802.8 tonnes in 2024, which was 26 per cent of the worldwide gold demand, inserting India at second rank, subsequent to China with a client demand of 815.4 tonnes. “Cherished by households, cheered by buyers, hoarded by central banks and feted by speculators, the latest chequered journey of the shiny metallic has been straight out of a narrative guide, but additionally cautions as a concern gauge of the tempest ready on the sidelines. Time for India to have a devoted long-term gold coverage that helps localisation,” the report stated. It stated the gold worth has a direct influence on the USD INR change fee too, owing to the nation's large dependence on gold imports. The 2 are extremely correlated, round 0.73, implying that larger gold costs are related to Indian rupee depreciation, although the common import quantum makes it not a too important issue.
SBI examine stated China has a nationwide coverage on gold, which has a particular objective. It has a complete strategy to reshaping how gold is traded, saved, valued, and utilized in worldwide commerce. It represents a coordinated strategy to addressing a number of financial and geopolitical priorities concurrently.
On India's gold coverage until now, it stated, “if one had been to take an goal view of the coverage discussions on gold since 1978, one finds that the most important thrust has been to wean away the plenty from bodily gold. They had been subsequently solely short-term in horizon”.
“The time has now come to conceive a complete coverage on gold, and for such it is vital that one defines what gold is (commodity or cash) and the way gold is perceived by its final client,” the report stated.
The current tendencies in respect of gold coverage prominently embrace demand-reducing measures and recycling of present gold inventory for productive functions, it stated.
Nonetheless, since gold constitutes a supply of funds with no corresponding utility in capital formation, monetisation of gold will influence future investments in a optimistic approach.
There may be additionally a must have better debate on evolving a complete coverage on gold, say a gold-backed pension scheme, that may combine with broader monetary sector reforms and with foreign money convertibility on capital account, it added.
In keeping with the report, coverage instruments as Sovereign Gold Bonds (SGBs) aimed to supply a substitute for holding bodily gold and cut back its imports, have led to a rise in authorities debt. Capital loss alone for the excellent SGB models accounts for Rs 93,284 crore.
Additional, elevated returns of gold as an asset class have led to large inflows in gold ETFs. In FY25 (Apr-Sep), inflows in gold ETF jumped 2.7 instances, and in FY26, it elevated 2.6 instances. The web asset underneath administration of Gold ETF elevated to Rs 901.36 billion as on Sep'25, representing a 165 per cent rise year-on-year (yoy).
“Gold is actively being thought of for enhanced asset allocation now (10-20 per cent of portfolio as towards about 5 per cent earlier)…The stoic pitch by asset allocators and fund managers globally can proceed anchoring ‘larger highs' for the gold costs, dancing to the whims and fancies of buyers and speculators which will hold it indifferent from the ‘intrinsic worth' lengthy cherished by connoisseurs and prospectors alike,” the report stated.
The report famous that nations such because the US and Germany maintain greater than 77 per cent of their whole reserves within the type of gold. RBI held 15.2 per cent of its reserves in gold in FY26 (until October 10) in comparison with 13.8 per cent in FY25 and 9.1 per cent in FY24.
By way of reserve change, RBI's gold reserves have elevated by USD 25 billion in FY25 and USD 27 billion in FY26 to date until October 10, 2025, primarily because of valuation enhance.
By way of amount, the Reserve Financial institution added solely 0.6 tonnes of gold in FY26 (Apr-Sep) in comparison with 31.5 tonnes in FY25 (Apr-Sep).
“Nonetheless, there was a fantastic emphasis on storage localisation, a prudent transfer certainly, going by the fractured traces of coverage upheavals globally,” the report stated.
Home provide of gold is simply a fraction of the entire gold provide in India, with imports contributing round 86 per cent of the entire provide in 2024, as per the World Gold Council estimate.
Mining of gold in India is proscribed, thereby growing its reliance on imports. Gold mined throughout FY25 was 1,627 kg.
The examine stated that the latest discoveries of latest gold mines in numerous districts of Odisha, Jabalpur in Madhya Pradesh and Kurnool district in Andhra Pradesh might assist ease the strain on imports and are optimistic for the nation's present account stability.
