Indian domestic gold prices are expected to trade in the range of Rs 1,50,000 to Rs 1,80,000 per ten grams over the remainder of 2026, before rising further to a range of Rs 1,60,000 to Rs 1,90,000 per ten grams in 2027. According to a ICICI Bank Global Markets report, this projected price movement is in response to the ongoing uptrend in global gold prices alongside a steady depreciation in the Indian Rupee.
As per the report, the domestic gold market has already rallied by approximately 20 per cent on a year-to-date (YTD) basis. This sharp growth stems primarily from a 7 per cent depreciation of the Rupee so far this year, rising international rates, and the immediate pass-through of recent customs duty hikes.
A further near-term uptick of 2 to 3 per cent remains possible as the local market continues to absorb the impact of the customs duty hike from 6 per cent to 15 per cent, which became effective on May 13, 2026.
The report noted that the domestic projection for the rest of 2026 assumes an average USD/INR exchange rate of 96.00 and an international gold price average of around USD 4,700 per ounce. For 2027, the local price expectation relies on an average USD/INR level of 96.50. However, the report cautioned that there are specific downside factors that could alter this trajectory.
“Risks are for a flatter trajectory going into 2027 if the uptrend in global gold prices is much more modest than we have assumed that could take place if the FOMC embarks on a tightening regime,” the report said.
On the import side, India saw an 81 per cent year-on-year (YoY) surge in gold import values during April, which mostly reflected the higher pricing environment. However, actual import volumes slowed to about 30 tonnes in March and April compared to the 2025 monthly average of 50 tonnes, showing that elevated costs are curbing physical demand.
The report, citing data from the Association of Mutual Funds in India (AMFI), also noted a visible slowdown in gold ETF flows, which averaged Rs 26.5 billion over March and April, down from Rs 240.5 billion in January and Rs 52.5 billion in February.
On the global front, the report mentioned that gold values gained about 5 per cent YTD in 2026, following a 65 per cent rally over 2025. Prices dropped by nearly 15 per cent after the West Asian conflict began on February 28, 2026, driven by gold’s negative correlation with a strengthening US Dollar index.
The report highlighted that the US Dollar gained safe-haven traction because the United States is a net crude oil exporter, shielding its economy from the immediate terms-of-trade shocks affecting other global blocks. This trigger caused a broad unwinding of non-dollar assets.
Citing data from the World Gold Council, the report stated that for the first quarter of 2026, overall jewellery demand fell by 23 per cent and investment demand dropped by 5 per cent due to lower ETF flows, though central bank buying rose by 2 per cent. Total aggregate demand still managed a 2 per cent increase, indicating that structural bullish drivers remain functional.
