Rising gold prices lift India's inflation, distort trade data - ANZ Research
This story was originally published at 11:50 IST on 6 February 2026
Register to read our real-time news.Informist, Friday, Feb. 6, 2026
NEW DELHI – Rising gold prices have increased inflation in India, distorted trade data, weakened the rupee at times, and widened the current account deficit, ANZ Research said in a report. This trend has also played out across large gold-importing Asian economies, particularly China.
ANZ expects India's CPI in January to be higher at 2.7% due to fading base effects under the current CPI series (base year 2011-12), which is set to be discontinued and replaced by a new series with a recent base year, the report said.
Even then, high gold price inflation in rupee terms could keep core inflation elevated above 4.5%, it added. In countries like India, Indonesia, and China, jewellery accounts forover 1% of the CPI core basket. Notably, both China and India experienced nearly a 70% annual increase in gold prices, driven by substantial retail market premiums, it added.
Though ANZ has forecast India's January exports to rise 1.2% and imports 6.3%, it noted that gold imports "distorted the import data, and this affects the predictability of India's trade data." India is exposed to risks from rising gold prices, as the yellow metal accounts for 20% of the import basket.
Meanwhile, India's gold demand patterns are structurally shifting. Though domestic demand for gold fell 11% to 711 tonnes in 2025 due to higher prices, investment demand strengthened, with gold bars and coins rising 17%, and gold exchange-traded funds holdings up 37% at 95 tonnes. Going ahead, ANZ sees a downside to the current account deficit forecast of 1.7% of GDP. End
US$1 = INR 90.42
Reported by Afra Abubacker
Edited by Avishek Dutta
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2026. All rights reserved.
To read more please subscribe
Share this Story:
