Like Viv Richards’ famous quip to Sunny Gavaskar that the scoreboard remains at zero whether you bat at No. 1 or No. 4, simply replacing the Fed chair will not change the economic reality. Whether it’s Jerome Powell or Kevin Warsh, high inflation means the Federal Reserve is unlikely to cut interest rates. Although higher rates have pressured gold, its average annual price has still risen steadily from $1,160.06 per ounce in 2015 to $3,431.54 in 2025.
2026 has been a turbulent year for precious metals. As of June 30, gold has fallen 6-7% from its end-2025 level of $4,307 per ounce and is down 39% from its record high of $5,600 reached on January 27, hovering just above $4,000 per ounce. Silver has been even more volatile, dropping about 24-25% this year from $71.99 to around $57-58 per ounce after peaking near $121 in late January.
Gold is caught between a strong US dollar and persistent inflation, which could keep interest rates elevated. Unlike the Ukraine and Israel-Hamas conflicts that boosted gold’s safe-haven appeal, the US-Israel conflict with Iran failed to sustain the rally. After hitting a record $5,600 per ounce on 27 January 2026, gold retreated sharply, briefly rebounding to $5,400 during the conflict before slipping below $4,000, raising questions about whether its traditional safe-haven status is weakening.
The Iran conflict disrupted Gulf oil supplies, pushing crude above $100 per barrel, while a stronger US dollar, supported by perceptions of US geopolitical strength, outweighed gold’s safe-haven appeal. As a result, gold fell during the conflict instead of rallying, leaving it squeezed between a strong dollar and the prospect of prolonged high interest rates, prompting questions over the future of its bull run.
Bull Case Remains Intact
Far from it! It is worth noting that gold’s bull-run continued even in the face of prolonged period when Jerome Powell was on an interest rate hike spree to curb inflation. Every year over the last decade saw the average gold increase year on year. Gold still has some gas left in it. Its next bull-run could be just around the corner. But, yes, it is not going to be smooth sailing for gold anymore. Gold has fight on its hand!
Gold faces near-term pressure from a strong US dollar, ETF outflows and the likelihood of interest rates staying high, raising the risk of prices falling below $4,000 per ounce. Although major LBMA forecasters have lowered their 2026 outlooks after a weak first half, most still expect gold to recover above current levels. Barclays forecasts gold at $4,800 in 2026 and $4,900 in 2027, while Goldman Sachs and ING have cut their targets amid expectations of prolonged higher interest rates. Despite the weaker outlook, some analysts argue that mounting sovereign debt, policy uncertainty and continued central bank buying keep gold’s long-term investment case intact.
It is true that the strong USD, high oil prices, fears of a regime of high interest rate by the fed resulted in stock markets’ upsurge. But Bitcoins too were down by 50% from their high in October 2025 just like gold near the $4,000 per ounce mark now was last seen in October 2025. The delicate state of the US economy and its debt burden more than offsets any surge in the USD or the US stock markets. With 45% of global Central banks indicating continued gold purchases by them also overrides the sale of gold by Russia and Turkey.
Ultimately, though the price forecasts have been revised by many LBMA forecasters, even these reduced price forecasts are way above the current price levels of gold and silver. Then, gold continued its bull-run even when the Fed was in an interest rate hike regime since 2022 to curb inflation. All of which underlines the belief that gold’s bull rally is far from over. There is still a long way to go in the gold rally!
India’s Untapped Gold Opportunity
In India, rising import duties and tighter import rules have renewed efforts to mobilise the estimated 30,000-35,000 tonnes of privately held gold. The author argues that past schemes such as the Gold Monetisation Scheme (GMS) and Sovereign Gold Bonds (SGBs) failed because they focused on investment returns rather than unlocking idle gold. Future programmes should involve jewellers and NBFCs, particularly in Tier 2 and Tier 3 towns, to target investment gold such as bars and coins, which account for 25-30% of private holdings. The author also notes that Indian consumers have become more inclined to hold on to gold in anticipation of future price gains, even during market corrections.
The commissioning of the Jonnagiri gold mine on June 24, 2026, India’s first private gold mine in nearly 2,000 years, marks the beginning of a potential revival in domestic gold mining. With projects such as Ganajur Gold Mines, expansion plans at Hutti Gold Mines and new exploration in several states, the author believes India could gradually build a stronger mining industry, much as China did over the past three decades, with Jonnagiri serving as the first step in that journey.
It would seem that India’s sleeping gold mining sector is slowly waking up to its potential. It is pertinent to note here China did not become the largest gold mining country overnight. In the 1990s, China’s small artisanal gold mines aggregated around 100-150 tonnes per annum. In 2025, China mined over 384 tonnes of gold to continue its reign as the largest gold producing country in the world. Probably, in 10 years’ time India could become the China of the 1990s in the gold mining sector. Is Jonnagiri’s 750 kgs small step set to become the first big step for the Indian gold mining sector? One can only sincerely hope so!