After Onion and Tomato, Gold–Silver Added to RBI’s Inflation Watch — What Changes Now?
After Onion and Tomato, Gold–Silver Added to RBI’s Inflation Watch — What Changes Now?
Vegetables like onion and tomato are no longer the only everyday indicators shaping India’s inflation narrative. Gold and silver have now joined the list. In a move that caught the attention of markets and consumers alike, the Reserve Bank of India (RBI) has expanded its inflation monitoring framework to include precious metals, reflecting their growing influence on household spending and economic trends.
The decision was announced after the latest Monetary Policy Committee (MPC) meeting held on Friday, where the central bank rolled out several key policy measures. The most closely watched announcement was on interest rates. RBI chose to keep the repo rate unchanged, offering relief to borrowers as loan EMIs will not rise for now. Alongside this, the central bank increased the maximum loan limit for MSME businesses to ₹20 lakh, aiming to provide stronger credit support to small enterprises.
Gold and silver enter inflation radar
Beyond rates and lending, the RBI’s stance on inflation drew significant attention. The central bank confirmed that gold and silver prices will now be tracked as part of the inflation monitoring framework, along with traditionally observed items such as onion and tomato. The inclusion comes amid a sharp rise in precious metal prices, which has raised concerns among policymakers worldwide.
According to market experts, this step is intended to offer a broader and more accurate picture of inflationary pressures in an economy that is increasingly sensitive to global price movements and domestic consumption patterns. However, analysts also made it clear that this policy shift does not directly mean that gold or silver prices will fall as a result.
Inflation remains under control—for now
Despite the surge in precious metal prices, India’s core inflation remains well within manageable levels. Core inflation, measured through the Consumer Price Index (CPI) while excluding food and fuel, has stayed stable. December data shows that when gold and silver are excluded, inflation stands at 2.6%, reinforcing the view that overall price pressures are currently under control.
That said, the RBI has urged caution. The central bank warned that geopolitical tensions, instability in energy markets, and unpredictable weather conditions could push inflation higher in the coming months. It also noted that due to unfavorable base effects, year-on-year inflation could rise by the end of FY 2025–26, even if the pace of inflation growth appears moderate. With global uncertainty on the rise, RBI emphasized the need for continued vigilance.
What’s driving gold and silver prices?
Over the past year, gold and silver prices have climbed sharply, fueled by global uncertainty and ongoing geopolitical conflicts. Several factors have contributed to this rally, including a weakening US dollar, expectations that real interest rates may remain negative, and heightened investor anxiety over financial and geopolitical risks.
Market data reflects this volatility. On Friday evening around 5 pm, gold prices on the MCX jumped by ₹1,000 to reach ₹1.53 lakh. In contrast, silver prices moved in the opposite direction, slipping by ₹3,000 to settle at ₹2,40,540.
