Finance Minister Nirmala Sitharaman and RBI Governor Sanjay Malhotra have sought to calm concerns over the recent surge in gold and silver prices. Both leaders said the government and the central bank are closely monitoring developments. They stressed that there is no immediate threat to economic stability.
Speaking after the customary post Budget meeting with the Central Board of Directors of the Reserve Bank of India, Sitharaman explained that India depends entirely on imports to meet its gold demand. Every ounce of gold that enters the domestic market is imported. She noted that this structural dependence makes India sensitive to global price movements.
The Finance Minister said gold has always been a preferred investment for Indian households. Demand typically rises during festival seasons such as Akshaya Tritiya and other auspicious occasions. She described this pattern as seasonal and deeply rooted in tradition. According to her, the current demand has not crossed historical limits. The situation, she said, has not reached alarming levels.
Sitharaman also pointed to global factors driving the price rally. She said the current spike cannot be viewed only through the lens of Indian consumption. Central banks across the world are purchasing large quantities of gold and silver to strengthen their reserves. This wave of institutional buying has pushed international prices higher than usual market fluctuations. As a result, Indian consumers are paying more even though their buying habits remain broadly unchanged.
Adding to her remarks, RBI Governor Sanjay Malhotra shared data on gold imports. He said that between April and September, the value of gold imports saw only a marginal rise of about one billion dollars. The overall figure remained in the range of forty nine to fifty billion dollars. He explained that higher global prices were offset by lower import volumes, which kept the total value stable until December.
However, he noted that January witnessed a noticeable jump in both value and volume. The central bank is still analysing these figures. Malhotra emphasised that gold demand in India is influenced by seasonal cycles and periodic spikes. At this stage, the RBI is not unduly concerned.
He also highlighted the strength of India’s external sector. The current account deficit is projected to remain around one percent of GDP, which he described as manageable. Even if gold imports rise moderately, broader macroeconomic indicators remain stable.
The Finance Minister reiterated that the government is keeping a close watch on precious metal prices. She underlined that India’s gold demand is cultural as well as financial in nature. While global trends are pushing prices upward, domestic consumption remains within familiar patterns.
Together, the Finance Minister and the RBI Governor delivered a clear message. The rise in gold and silver prices is being monitored carefully. Global central bank buying and international market trends are the primary drivers. For now, India’s economic fundamentals remain steady and the situation is under control.
