Gold’s Role in Viksit Bharat: WGC’s Strategic Roadmap – CEO Sachin Jain
Amidst a sharp rise in US gold imports in recent weeks, the World Gold Council (WGC) is charting a strategic roadmap to define the role of gold in India’s ‘Viksit Bharat’ (Developed India) goal by 2047. Sachin Jain, Regional CEO of WGC India, revealed this insightful plan during the India Gold Policy Centre-IIMA Annual Gold & Gold Markets Conference 2025 in the Capital. Deloitte and other experts have been diligently engaged to draft this comprehensive document, paving the path for India’s gold future over the next two decades.
Gold price trends post-Trump inauguration
Following Trump’s inauguration on January 20, 2025, gold prices have surged, reaching $2,925.10 per ounce by February 28, 2025, reflecting a remarkable 42 percent annual return. Analysts attribute this remarkable uptick to various factors, including Trump’s proposed tariffs on steel and aluminum, sparking trade war fears. Consequently, investors have flocked to gold as a safe-haven asset, leading to a notable increase in US gold imports in anticipation of potential tariff hikes.
Moreover, China and India’s central banks have bolstered global gold demand by increasing their gold reserves. The latest data from the World Gold Council reveals that India’s gold reserves stand at over 800 tonnes, while China boasts official reserves exceeding 2,200 tonnes. The ongoing Russia-Ukraine conflict has further fueled market volatility, prompting investors to exercise caution amid uncertainties surrounding US foreign policy under the Trump administration. A weaker US dollar in early March has further propelled gold’s price surge, coupled with market expectations regarding Federal Reserve interest rate decisions.
India’s strategic vision for gold
India, the world’s second-largest consumer of gold, witnesses an annual demand surpassing 700-800 tonnes. Despite the uncertainty surrounding the release timeline of the strategic report, Jain underscores its significance as a guiding compass for the nation’s gold trajectory over the next 20 years.
Future outlook
Looking ahead, Jain advocates for global gold prices to be primarily influenced by demand and supply dynamics, rather than external geopolitical and macroeconomic uncertainties. With markets eagerly anticipating clarity on US trade policy, interest rate decisions, and geopolitical stability, gold is poised to remain a prominent investment avenue for hedging risks in an uncertain global economy. Mike Oswin, the Global Head of Market Structure and Innovation at the World Gold Council, highlights the importance of allowing Indian banks to recognize gold as a liquid asset for liquidity coverage ratio purposes. He emphasizes that integrating gold into the Indian financial system would alleviate capital requirements for banks, making it more accessible for operational use.
In conclusion, embracing gold as a liquid asset at a policy level would significantly reduce the capital requirements on bank balance sheets, enabling banks to seamlessly incorporate gold into their operations. By aligning with the affinity for gold in the Indian market, this strategic shift holds immense potential to reshape India’s financial landscape, paving the way for a more gold-integrated economy.
