‘Gold prices are rising because central banks are accumulating it’: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman said that aggressive gold accumulation by central banks worldwide is a major factor behind the recent surge in bullion prices, highlighting a structural shift in global reserve strategies.

“Gold price spikes because central banks globally are buying a lot of it,” she said while addressing reporters after a meeting of the Central Board of the Reserve Bank of India on February 23.

Gold prices continued their upward momentum across domestic and international markets amid escalating geopolitical tensions mainly due to US-Iran developments and renewed tariff threats from US President Donald Trump. Investors have increasingly turned to precious metals as a hedge against uncertainty, currency volatility, and equity market swings.

On the Multi Commodity Exchange of India (MCX), gold opened the day's session at ₹1,60,049 per 10 gm for 24-carat purity, marking a 2.02% jump from the previous close. Later in the day, gold futures traded about 1.51% higher at ₹1,59,239 per 10 gm, while silver surged over 4% to ₹2,63,193 per kg.

In global markets, bullion remained firm on COMEX, with gold trading near $5,157-$5,182 per ounce during morning deals, up roughly 2% over the past 24 hours. Silver prices also rallied sharply, mirroring strong safe-haven demand.

Market participants say the rally is being supported not just by geopolitical stress but also by sustained institutional buying and macroeconomic tailwinds such as a softer US dollar.

Ponmudi R, CEO of Enrich Money, noted that gold remains in a broader uptrend despite recent corrections.

“Comex gold is trading near the $5,100–$5,200 zone after a sharp correction from highs above $5,500. The broader uptrend remains intact, with the pullback reflecting profit booking and healthy consolidation,” he said.

He added that strong buying interest is visible in the $4,650-4,800 support band globally, while domestically MCX gold is holding key support between ₹1,45,000 and ₹1,50,000. A sustained move above ₹1,60,800 could push prices toward ₹1,65,000-1,75,000 in the medium term.

On capital flows, the Union minister observed that while global investments are typically driven by macroeconomic stability and policy predictability — and India meets many of these criteria — foreign inflows have not always materialised at expected levels.