Image Source: Money Control
New Delhi: On Friday, Reserve Bank of India (RBI) Governor Sanjay Malhotra stated that gold is supplanting crude oil as an important indicator of global uncertainty, cautioned of stock market correction, and warned that many economies are going through fiscal stress.
Malhotra, speaking at the Kautilya Economic Conclave 2025, said that while the world confronts geopolitical pressures and economic pressures, the prices of oil have remained stable. This is a stark contrast to previous periods when a crisis caused prices to skyrocket.
Upcoming Worldwide Risks
The RBI Governor gave caution of three major risks:
- Correction in Equity Market: Equity markets driven by technology may be reaching complacency, he stated, suggesting that a correction may be on its way.
- Fiscal stress: Nearly all major economies are exhibiting signs of financial strain.
- Trade policy tensions: Prolonged trade disputes may impair global growth.
His remarks followed shortly after the RBI kept the policy rate at 5.5%, with a neutral stance, citing global economic resilience, with uncertainty remaining.
“Despite geopolitical tensions that would have sent oil prices soaring in an earlier decade, they (oil prices) have been very range-bound. This could be due to a decline in oil intensity in GDP, not just in India, but across the world. Perhaps gold prices now are showing the kind of movement that oil used to that is acting as a barometer of global uncertainty,” the RBI Governor said, PTI reported.
Gold Prices Rise
Gold prices in India maintained their upward momentum on October 3, marking the seventh consecutive week of increase. In morning trade on the Multi Commodity Exchange (MCX), gold stood at ₹1,16,960, down 0.52%, while spot gold was $3,851.99 per ounce, close to the record $3,896.49 per ounce set the day before.
Expectations of US Federal Reserve rate cuts and concerns about the continued US government shutdown have fueled the rally.
Over the last 20 years, gold prices have risen by nearly 1,200%—from ₹7,638 in 2005 to over ₹1,00,000 in 2025. The metal has provided positive returns in 16 out of the last 20 years and is already up 31% in 2025.
Key points
As oil has lost its previous role as a barometer of global risk, gold has taken its place. For investors and policymakers, this shift suggests that gold prices are increasingly seen as not just jewelry or an investment, but a predominant global barometer of uncertainty.
