Mon Mar 03 07:25:53 UTC 2025: ## Gold’s Rising Importance in a Turbulent Global Economy

**New Delhi, March 3, 2025** – Chief Economic Advisor V. Anantha Nageswaran has predicted a surge in gold’s importance as an investment asset in the coming years, highlighting its role in portfolio diversification amidst global economic uncertainty. Speaking at the IGPC-IIMA annual gold and gold markets conference, Nageswaran emphasized gold’s continued relevance as a store of value, a cultural symbol, and a crucial hedge against economic instability.

Nageswaran cited the recent rise in gold prices – up over $200 per ounce in the last three months to $2,860 – contrasting with a simultaneous decline in Indian stock markets. Since 2002, the value of gold has increased tenfold. In India, the price per 10 grams currently stands at approximately ₹85,000.

The CEA acknowledged the policy challenge of managing India’s substantial gold holdings while maintaining its cultural significance. He suggested that India should review its past gold monetization schemes, aiming for more productive deployment of assets without diminishing its value as a store of value or its cultural and religious importance.

Nageswaran also expressed concern over the global rise in debt-to-GDP ratios, arguing that such high levels lead to debt becoming a “deadweight,” hindering development spending and potentially prompting governments to use inflation to reduce debt’s real value. This, coupled with lingering inflationary fears and the consequences of past policy decisions, further solidifies gold’s importance, he stated.

The World Gold Council (WGC) reported a 5% increase in India’s gold demand in 2024, reaching 802.8 tonnes, with projections of 700-800 tonnes for 2025. Despite government initiatives like the 2015 Gold Monetisation Scheme aimed at reducing reliance on gold imports, Nageswaran stressed the need for a balanced approach, recognizing the diverse significance attached to gold by the public. He warned against the prevailing mindset of expecting perpetually rising asset prices and the tendency to seek policy relief during market downturns, advocating for greater investor discipline. India’s debt-to-GDP ratio is projected to fall slightly in the coming fiscal year, while GDP growth remains strong.

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