Gold Prices In India To Surge To Rs 125,000 By 2026: Report

Indian gold prices are expected to continue rising, trading in the range of Rs 99,500 to Rs 110,000 per ten grams over the rest of 2025, and moving higher to Rs 110,000 to Rs 125,000 in the first half of 2026, according to a research note by ICICI Bank's Economic Research Group.

"Risks to these projections are to the upside if the INR trades at a much depreciated level against the USD than our projections. We have assumed an average range of 87.00-89.00 for the USD/INR pair for the period," noted the report.

The report highlights that global gold prices have surged about 33 per cent so far in 2025, supported by expectations of monetary easing by the US Federal Reserve and persistent institutional concerns about the US economy. Analysts forecast global bullion to average USD 3,400-3,600 per ounce during the remainder of 2025 and strengthen further to USD 3,600-3,800 per ounce in the first half of 2026.

"If geo-political tensions intensify, there could be a further upside to these ranges," adds the report.

The continued concerns about structural weakness and institutional concerns about the US economy are expected to keep gold prices trading with a bullish bias in the medium term. Despite a slight easing in safe-haven buying, the report notes that medium-term bullish expectations for the yellow metal remain intact. The anticipated gains are seen as closely tied to developments in the United States.

While gold buying has eased amid reduced geopolitical tensions and trade war uncertainties, the note stresses that the next leg of gold's rally will be driven by US developments. These include the anticipated 125 basis points of Fed rate cuts over 2025-26 and ongoing diversification by central banks and investors away from the US dollar.

Domestically, the upward trajectory in gold has been fuelled by both a weaker rupee and strong investment demand. Indian imports rose sharply from USD 1.8 billion in June to USD 4.0 billion in July 2025, reflecting firm local demand ahead of the festive season.

Gold ETFs in India also saw significant inflows, with YTD investments nearly doubling compared to last year. The report also pointed out that investor appetite has been evident in gold exchange-traded funds (ETFs). 

It cited data from the Association of Mutual Funds in India (AMFI) showing a net inflow of Rs 12.6 billion in July. While this was lower than June's inflow of Rs 20.8 billion, the year-to-date tally of Rs 92.8 billion was more than double the Rs 45.2 billion seen in the same period last year.

However, the report cautions that risks to the projections are skewed to the upside, particularly if the Indian rupee depreciates beyond the assumed range of 87-89 against the US dollar.

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