Gold and silver prices are expected to remain firm amid persistent global uncertainties, even as global commodity prices are projected to soften in FY27 on the back of subdued crude oil prices and modest global growth, the Economic Survey 2026 tabled on Thursday said.
Prices of precious metals -- particularly gold and silver -- are expected to continue rising, driven by sustained demand for safe-haven assets amid global uncertainty, trade tensions and geopolitical instability. As of January 26, 2026, gold prices stood at USD 5,101.34 per ounce. While some analysts believe the sharp rally seen in 2025 may not be sustained, elevated precious metal prices could continue to influence inflation dynamics.
In contrast, the World Bank's Commodity Prices Outlook has projected global commodity prices to decline by around 7 percent in FY27, largely due to oversupply and softer crude oil prices. The outlook reflects a dim medium-term global growth environment, with downside risks dominating and demand remaining modest. However, geopolitical risks could disrupt this trajectory.
Base metals such as iron, copper and aluminium are also expected to see moderate price increases. In the case of copper, demand from green technologies and data centres, coupled with supply disruptions, could keep prices elevated despite the broader softening trend in commodities.
Also Read: India to see higher inflation as weaker rupee poses risk, soft commodities offer relief
The divergence in commodity prices has implications for inflation and credit trends in India. While easing food and energy prices have contributed to a moderation in inflation, rising precious metal prices have kept core inflation sticky.
Excluding precious metals, underlying inflationary pressures are more subdued, though both headline inflation and core inflation (excluding precious metals) are expected to be higher in FY27 than in FY26. Economists, however, believe this increase is unlikely to pose a macroeconomic concern.
High gold prices have also influenced credit patterns. Among major segments of non-food credit, personal loans recorded the highest year-on-year growth at 12.8 per cent in November 2025. A key driver was a sharp 125.3 per cent increase in loans against gold jewellery, reflecting households leveraging rising gold valuations.
Regulatory measures, including revised guidelines on voluntary pledging of gold and silver jewellery as collateral for small business loans, have also helped improve credit flow to the MSME sector.
On the trade front, India’s import basket continues to be dominated by petroleum crude, gold and petroleum products, which together account for over one-third of total imports. In FY25, crude oil imports rose marginally by 2.7 per cent year-on-year amid softer prices, indicating stable energy demand, while gold imports surged by 27.4 per cent.
India’s foreign exchange reserves rose to USD 701.4 billion as of January 16, 2026, from USD 668.3 billion at the end of March 2025, providing a buffer against volatility in global interest rates, capital flows and commodity prices.Also Read: Silver smashes Rs 4 lakh mark, gold rockets Rs 10,000 as Fed holds rates
Looking ahead, inflation is expected to remain within target ranges, supported by strong agricultural output, stable global commodity prices and continued policy vigilance. The pass-through of GST rate rationalisation into commodity prices is also expected to help contain cost-side pressures.
Similar inflation moderation trends have been observed across major Southeast Asian economies, including Malaysia, Indonesia and the Philippines, aided by lower imported commodity costs.
Prices of precious metals -- particularly gold and silver -- are expected to continue rising, driven by sustained demand for safe-haven assets amid global uncertainty, trade tensions and geopolitical instability. As of January 26, 2026, gold prices stood at USD 5,101.34 per ounce. While some analysts believe the sharp rally seen in 2025 may not be sustained, elevated precious metal prices could continue to influence inflation dynamics.
In contrast, the World Bank's Commodity Prices Outlook has projected global commodity prices to decline by around 7 percent in FY27, largely due to oversupply and softer crude oil prices. The outlook reflects a dim medium-term global growth environment, with downside risks dominating and demand remaining modest. However, geopolitical risks could disrupt this trajectory.
Base metals such as iron, copper and aluminium are also expected to see moderate price increases. In the case of copper, demand from green technologies and data centres, coupled with supply disruptions, could keep prices elevated despite the broader softening trend in commodities.
Also Read: India to see higher inflation as weaker rupee poses risk, soft commodities offer relief
The divergence in commodity prices has implications for inflation and credit trends in India. While easing food and energy prices have contributed to a moderation in inflation, rising precious metal prices have kept core inflation sticky.
Excluding precious metals, underlying inflationary pressures are more subdued, though both headline inflation and core inflation (excluding precious metals) are expected to be higher in FY27 than in FY26. Economists, however, believe this increase is unlikely to pose a macroeconomic concern.
High gold prices have also influenced credit patterns. Among major segments of non-food credit, personal loans recorded the highest year-on-year growth at 12.8 per cent in November 2025. A key driver was a sharp 125.3 per cent increase in loans against gold jewellery, reflecting households leveraging rising gold valuations.
Regulatory measures, including revised guidelines on voluntary pledging of gold and silver jewellery as collateral for small business loans, have also helped improve credit flow to the MSME sector.
On the trade front, India’s import basket continues to be dominated by petroleum crude, gold and petroleum products, which together account for over one-third of total imports. In FY25, crude oil imports rose marginally by 2.7 per cent year-on-year amid softer prices, indicating stable energy demand, while gold imports surged by 27.4 per cent.
India’s foreign exchange reserves rose to USD 701.4 billion as of January 16, 2026, from USD 668.3 billion at the end of March 2025, providing a buffer against volatility in global interest rates, capital flows and commodity prices.Also Read: Silver smashes Rs 4 lakh mark, gold rockets Rs 10,000 as Fed holds rates
Looking ahead, inflation is expected to remain within target ranges, supported by strong agricultural output, stable global commodity prices and continued policy vigilance. The pass-through of GST rate rationalisation into commodity prices is also expected to help contain cost-side pressures.
Similar inflation moderation trends have been observed across major Southeast Asian economies, including Malaysia, Indonesia and the Philippines, aided by lower imported commodity costs.
