Good news-gold prices will come down in 2025!
Finance minister Nirmala Sitharaman presented the Economic survey 2024-25 in parliament, which states that gold prices are likely to fall in the year 2025, while silver prices may rise. In the Economic review 2024-25 presented in parliament on Friday, it has been said that commodity prices are expected to fall by 5.1 percent in the year 2025 and 1.7 percent in the year 2026.
Gold prices expected to fall
The Economic review said that gold prices are expected to fall among precious metals, while silver prices may rise. Metal and mineral prices are likely to fall, the main reason for which is the fall in copper prices along with iron ore. It said that in general, the declining trend in prices of goods imported by india is positive for the domestic inflation outlook.
Citing the World Bank's 'Commodity Market Outlook' for october 2024, the Economic survey highlighted that the projected decline is due to oil prices, but is mitigated by the rise in natural gas prices and a stable outlook for metals and agricultural raw materials.
Reasons for India's rise in gold imports
Meanwhile, the Economic survey said that "the global increase in uncertainty has led to fluctuations in the composition of foreign exchange reserves. gold bullion holdings in 2024 have risen to near their highest level since the Second World War, driven primarily by the accumulation of gold by emerging market central banks. gold imports have increased due to the rise in global prices, early buying ahead of festive spending and demand for safe-haven assets." india is the largest importer of gold in the world.
The composition of foreign exchange reserves continues to fluctuate
The review found 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. In addition, the international Monetary Fund (IMF) has said that the global reserve system is undergoing constant changes, including a gradual move away from the dominance of the dollar and the increasing role of non-traditional currencies.
The Economic survey suggested that an expected decline in gold prices could impact investor sentiment, while an expected rise in silver prices could provide some support to the bullion market. Amid preparations for the upcoming financial year, the government is expected to closely monitor fluctuations in bullion prices and their impact on inflation, trade and foreign exchange reserves.
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