‘Allow private players to operate gold monetisation scheme’

A sharp rally in gold prices in the last 18 months has raised several issues. However, a long-term gold policy with several milestones is being drafted.

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In an online interview, Sachin Jain, regional chief executive office (CEO), India, World Gold Council (WGC), tells Rajesh Bhayani that fundamentals continue to support the gold rally in 2026, adding that despite the high price, consumers have increased their budget for jewellery-buying as a percentage of marriage expenses.

Edited excerpts:

Gold price has seen a sharp rally over the last two years. Will it fizzle out in 2026?

Sachin Jain: The rally seen in the last 18 months was purely driven by fundamentals. It started with the geopolitical crisis and global central banks buying gold to add to their reserves. De-dollarisation is another reason. The share of US dollars in global forex reserves, which was 74.5 per cent 18 months ago, has now fallen to 56 per cent, and a good part of it has been invested in gold. Rising US and global debt levels are another reason. US debt is $37 trillion. Even if all goes as planned by the US administration, it may fall to $33 trillion, but that will be in the medium to long term. Hence, in 2026 and in the medium term, reasons supporting the rally in the gold price remain in place.

Going forward, we have projected three scenarios. One, everything goes right and growth returns, debt reduces, and recession reverses, in which case gold price could fall 20 per cent. However, this is unlikely. Second, everything goes worse. The world experiences situations like a world war. In such a case, gold may rise 25-30 per cent. This is also unlikely. Finally, we learn to live with trade complications and high global debt. This is possible, and this means pillars of rally in gold price are also in place. Levels have to be seen. One has to keep in mind that the rally is not speculative but based on fundamentals.

With prices only rising, how will demand be impacted in India?