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Informist, Wednesday, Feb. 18, 2026

 

MUMBAI – Gold price stability may unlock deferred demand, while firm investment demand and wedding-related purchases in India are expected to support jewellery sales, World Gold Council's India Research Head Kavita Chacko said. The first six weeks of 2026 marked a record-breaking yet volatile period for gold, with international prices hitting 12 all-time highs, breaching $5,400 per ounce before correcting sharply towards the end of January. Despite the pullback, prices largely hovered around the $5,000-per-ounce level, signifying resilience, Chacko said in a report.

 

January closed with 14% gains in gold prices--the eighth consecutive monthly advance, with prices inching up a further 0.3% as of Feb. 13. Robust inflows into gold exchange-traded funds, escalating geopolitical tensions, and a weaker US dollar underpinned the gains. Domestic gold prices mirrored the move in international prices, rising to a record high of INR 175,231 per 10 grams. "Gains were more pronounced in INR (rupee) terms, with prices up 24% as of end-January, aided by the depreciation of the INR. Since then, however, prices have eased by 7%, in part reflecting the subsequent currency strengthening," Chacko said.

 

Gold prices in India were traded at a premium to international benchmarks during the latter half of January in the run-up to the Union Budget announced on Feb. 1. "Multiple upward revisions in customs tariff value, expectations of a potential increase in import duty (up from 6%), and healthy underlying demand pushed domestic prices to a premium of US$10/oz - US$70/oz ($10 per ounce-$70 per ounce) over international prices," Chacko said. The premium stayed until Feb. 11, after which it shifted to a discount, likely due to fewer revisions in customs tariff value and an increase in supply, Chacko said. 

 

"Jewellery buying has reportedly become measured, with consumers preferring staggered accumulation over lump-sum purchases, even for weddings," Chacko said. Overall jewellery volumes are estimated to fall 20% on year in January, although sales values have risen 25–30%, supported by elevated prices. Buying through exchange of old gold remains strong, making up 40–70% of transactions in certain markets. Investment demand for bars and coins continues to hold firm, with some market participants pointing to a possible reallocation of funds from capital markets into gold. Meanwhile, liquidation activity has been limited, suggesting confidence among holders that prices are unlikely to undergo a sharp correction.

 

January marked a historic month for Indian gold exchange-traded funds, with record-breaking inflows, holdings, assets under management, and investor participation, Chacko said. Gold ETFs saw its ninth consecutive month of net inflows, touching an all-time high of INR 240 billion, broadly in line with the council's estimates and ranking third globally after the US and China. Notably, gold ETF inflows exceeded those into equity funds for the first time, signalling a possible shift in investor asset allocation amid strong gold price momentum and muted domestic equity performance, Chacko said.

 

The surge in inflows, combined with elevated prices, pushed total gold assets under management to a record INR 1,842 billion by end-January, more than a threefold increase on a year-on-year basis. Cumulative holdings across 25 gold ETFs crossed 100 tonnes for the first time, rising a record 15.5 tonnes in January to 110 tonnes. The trend continued in February, with net inflows of about INR 46 billion recorded between Feb. 1 and Feb. 12, translating into an additional 3 tonnes to cumulative holdings. Gold ETFs now account for 2.3% of the total mutual fund industry's assets under management – the highest level on record – up from 0.8% a year ago.

 

"Buying interest in digital gold strengthened further in January, with activity reaching its highest level in the published data series dating back to January 2025," Chacko said. Purchases through the Unified Payments Interface totalled INR 39 billion, representing a nearly 90% on-month increase and more than a fourfold on-year rise. In volume terms, an estimated 2.6 tonnes was purchased through this channel, marking a 70% on-month increase. 

 

In January, the Reserve Bank of India's gold reserves recorded a marginal rise of 0.13 tonnes, marking the first monthly rise in four months and lifting total holdings to a record high of 880.3 tonnes, Chacko said. "As of early February, gold accounted for 17.2% of the country's foreign exchange reserves – the highest proportion on record. This marks an increase of nearly 6% compared to a year ago, attributable to the sharp appreciation in gold prices, which have risen by more than 70% during the period," Chacko said.

 

In January, India's gold imports rose to a three-month high of $12.1 billion, driven by strong investment demand across both gold ETFs and physical gold. Also, anticipation of a potential upward revision in import duty in the Union Budget may have prompted front-loaded shipments. Gold imports in January were up 192% on month. In volume terms, imports are estimated to be in the range of 95 tonnes to 100 tonnes, Chacko said.  End

 

US$1 = INR 90.65

 

Reported by Reshma Ravi

Edited by Tanima Banerjee

 

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