2026, Vol. 7, Issue 2, Part C

Gold has historically played a critical role in India’s economy, functioning both as a store of value and as a hedge against inflation. The relationship between gold pricing and economic progress is complex, shaped by macroeconomic variables such as GDP growth, inflation, interest rates, exchange rate fluctuations, and global economic uncertainty. This study examines the interplay between gold prices and India’s economic indicators, highlighting gold’s dual role as both an economic barometer and a driver of economic activity. The analysis demonstrates that gold prices tend to increase during periods of economic instability and inflationary pressure, whereas stable macroeconomic conditions generally temper such increases. Moreover, gold imports exert a significant influence on the Current Account Deficit (CAD) and overall economic stability. The study concludes that a nuanced understanding of gold’s economic implications is essential for policymakers, investors, and households in mitigating risk and fostering sustainable economic growth.