Gold prices rising in India on geopolitics, debt fears, central bank buying: World Gold Council CEO

Gold

• Gold prices rise due to geopolitical risks and debt concerns
• Central banks buy around 1,000 tonnes of gold yearly
• India's gold demand hit 711 tonnes in 2025 despite high prices

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Gold prices are being driven higher by a combination of geopolitical risks, rising concerns over global debt sustainability and sustained central bank buying, David Tait, chief executive officer of the World Gold Council, said on Friday. Speaking at the Rising Bharat Summit 2026, Tait said geopolitical uncertainty remains a key pillar of the ongoing gold rally.

The other key reason, as he described, is a deeper, more persistent fear around runaway sovereign debt. Tait said central banks have collectively bought around 1,000 tonnes of gold annually over the past three years, with buying expected to continue. “Debt is running through this whole gold rally,” Tait said. He pointed to episodes such as sharp moves in US bond yields following tariff announcements as moments of stress driven not by inflation, but by concerns over governments’ ability to finance debt.

Tait said central banks in developing economies, including India, are continuing to build gold reserves as they remain “behind the gold-buying curve” compared with Western central banks. He added that central banks increasingly treat gold as a long-term, static reserve asset rather than something to be actively rebalanced, even after sharp price appreciation.

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On demand trends, Tait said global gold demand touched record highs last year. In India, total gold demand stood at around 711 tonnes in 2025, even as jewellery demand declined due to rising prices. However, investment demand in bars and coins rose 17 percent year-on-year, reflecting growing investor unease over financial stability and currency risks.

He said gold demand in India remains structurally well supported by cultural factors, but future growth is likely to come increasingly from institutions such as pension and insurance funds as gold becomes more embedded within diversified portfolios.

Tait said the only scenario that could materially weaken gold prices would be a sharp acceleration in US economic growth -- to around 6-7 percent -- accompanied by moderate inflation, which could place public debt on a declining path. He described the probability of such an outcome as “very low”.

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