Gold’s strong rally in recent years could continue as global uncertainty, strong investment demand and rising central bank buying keep the precious metal attractive for investors.
Speaking at the India Today Conclave 2026, Sachin Jain, Regional CEO (India) at the World Gold Council, said the role of gold in the global financial system has evolved significantly over the past three decades, with investment demand and central bank purchases now playing a much larger role in supporting prices.
Jain explained that gold consumption patterns have changed dramatically over time.
“Thirty years ago, central banks were net sellers of gold and the primary demand came from jewellery,” he said.
Today, the demand landscape looks very different. Developing markets now account for over 70% of global gold consumption, while the sources of demand have diversified significantly.
According to Jain, central banks currently account for around 20–22% of global gold demand, while investment demand contributes about 40–42%, jewellery around 30%, and about 10% comes from technological applications, including electronics, renewable energy systems and smartphones.
He said the rally in gold prices over the past two years has been driven by multiple factors.
“We saw the rally begin with strong central bank buying in 2024, followed by rising investment demand in 2025,” Jain said.
He added that declining confidence in global currencies and rising geopolitical tensions have further strengthened gold’s appeal as a safe-haven asset.
GOLD STILL ATTRACTIVE DESPITE HIGH PRICES
Addressing concerns about whether it is the right time to buy gold, Jain pointed to the long-term trajectory of prices.
“Twenty-five years ago, 10 grams of gold cost about Rs 4,000, and even then people believed it was expensive,” he said.
According to Jain, gold demand in India has historically moved closely with rising incomes.
“Every time income or wealth in the hands of Indians increases by 1%, gold demand tends to rise by about 0.9%,” he said.
He noted that strong investment demand in the current environment has been one of the key drivers behind the metal’s rally.
WHAT COULD BRING GOLD PRICES DOWN?
While Jain acknowledged that predicting short-term price movements is difficult, he said the fundamental factors supporting gold prices remain strong.
“If the US, China and Russia suddenly fall in love with each other and the world becomes a perfect place with peace and harmony, then perhaps gold prices could come down,” he said.
“But the pillars on which gold prices are built today remain quite strong.”
GOLD SHOULD BE A LONG-TERM INVESTMENT
Jain advised investors to view gold as a long-term portfolio diversifier rather than a short-term trade.
“Gold can be a great diversifier in an investment portfolio. Allocating around 10–15% of a portfolio to gold generally improves the overall health of the portfolio,” he said.
He added that gold’s role as a safe haven, hedge against uncertainty and diversification tool continues to make it a relevant asset for investors, particularly during periods of geopolitical and economic volatility.
