Surging gold prices driving core inflation higher: Crisil

The spike in the prices of gold, a preferred safe haven asset amid global uncertainty, has pushed India's core retail inflation on an upward trajectory for four months in a row, even as the headline price rise pace measured by the consumer price index (CPI) fell to a 75-month low of 2.8 per cent in May, rating agency Crisil said in a report on Wednesday.

- SHIVA RAJORA

"While rising core inflation is indicative of strengthening domestic demand (and the resulting price pressure) in the economy, the recent spike is tied to global economic volatility rather than domestic factors," the report co-authored by Crisil chief economist Dharmakirti, principal economist Dipti Deshpande and junior economist Sharvari Rajadhyaksha reckoned.

Between May 2024 and May 2025, core inflation which excludes volatile food and energy prices, had risen 111 basis points (bps) to 4.2 per cent. One basis point equals 0.01 per cent. While prices in most sub-categories measured for core inflation had declined, five segments bucked the trend — gold, mobile tariffs, travel and transport, toiletries and silver.