Inflation Watch: Precious Metals Shine Amid Global Uncertainty

The Economic Survey predicts manageable inflation next fiscal year despite rising gold and silver prices. Favorable supply conditions and GST rate alignment support a positive inflation outlook. However, currency and metal price risks necessitate continued monitoring and policy adaptation by RBI and IMF forecasts.

The Economic Survey released on Thursday forecasts that inflation will remain manageable in the upcoming fiscal year, despite anticipated increases in gold and silver prices. These metals are expected to see sustained demand as safe-haven investments amid persistent global uncertainties.

The Survey notes that inflation is kept in check by favorable supply-side conditions and the gradual implementation of GST rate rationalization. Looking ahead, the outlook remains positive, bolstered by strong agricultural production, stable global commodity prices, and vigilant policy measures. However, vigilance is necessary due to currency fluctuation risks, base metal price surges, and ongoing global uncertainties.

The Survey points out that unless global peace stabilizes and trade disputes are fully resolved, precious metals will continue to rise in value. Despite projections from the RBI and IMF indicating an increase in headline inflation, it is expected to remain within the target range of 4% (+/- 2%). Projections indicate inflation will reach 3.9% and 4% in early FY27.