Gold prices to decline, silver to rise in 2025: Economic Survey

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Gold prices are expected to decline in 2025 while silver prices may increase, according to Economic Survey 2024-25 tabled in Parliament on Friday(January 31, 2025).

Citing the World Bank’s Commodity Markets Outlook for October 2024, the economic survey highlighted that commodity prices are projected to decrease 5.1% in 2025 and 1.7% in 2026.

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The projected declines are led by oil prices but tempered by price increases for natural gas and a stable outlook for metals and agricultural raw materials.

Among precious metals, gold prices are expected to decrease while silver prices may increase. Prices for metals and minerals are expected to decline, primarily due to a decrease in iron ore and zinc prices, the economic survey said.

“In general, the downward trend movement in prices of commodities imported by India is a positive for the domestic inflation outlook,” it added.

Meanwhile, the survey said “a global rise in uncertainty has led to fluctuations in the composition of foreign exchange reserves. CY24 saw gold bullion holdings nearing their highest level since World War II, which was largely driven by an accumulation of gold by emerging market central banks”.

Gold imports have increased, influenced by higher global prices, early purchases ahead of festive spending, and demand for safe-haven assets.

The survey observed that uncertainty in global markets has led to fluctuations in the composition of foreign exchange reserves, as central banks adjust their holdings to mitigate risks.

Further, the International Monetary Fund (IMF) has noted steady changes are underway in the global reserve system, including a gradual movement away from dollar dominance and a rising role of non-traditional currencies, it said.

The survey suggested that while the projected decline in gold prices may affect investor sentiment, the expected rise in silver prices could provide some support to the bullion market.

As the government prepares for the upcoming fiscal year, it expects to closely monitor price movements of the bullion and their impact on inflation, trade, and foreign exchange reserves.

India, one of the world’s largest importers of gold, has traditionally witnessed strong demand for the metal, particularly during the festival and wedding seasons.