RBI Expands Inflation Monitoring to Include Gold, Silver, and Key Vegetables

The Reserve Bank of India has said rising gold and silver prices are now influencing its inflation projections. In its latest Monetary Policy Committee statement, the central bank noted that precious metals are adding to headline price pressures, along with volatile food items such as onions and tomatoes. 

The RBI said the slight upward revision in its inflation outlook is largely due to higher prices of gold and silver. The 2 metals together contributed around 60-70 basis points to the revised projection. 

Underlying Price Pressures Remain Low 

Core inflation, which excludes food and fuel, has stayed moderate in recent months. When gold is also excluded, core inflation stood at 2.6% in December, indicating that price pressures across most sectors remain limited. 

The central bank said risks to underlying inflation are broadly balanced. Headline inflation is expected to remain near the target over the coming quarters, provided there are no major shocks. 

Food Inflation Outlook 

Food inflation is projected to stay under control in the near term. The RBI cited strong kharif output, comfortable foodgrain buffer stocks and favourable rabi sowing as supporting factors. 

However, it warned that geopolitical tensions, volatile energy prices and adverse weather conditions could push inflation higher. It also said base effects may lead to a rise in year-on-year headline inflation towards the end of 2025–26. 

Role of Imports and Global Prices 

Gold and silver prices have risen over the past year amid global uncertainty and shifts in investor sentiment. India depends heavily on imports to meet domestic demand for precious metals, making local prices sensitive to international trends and currency movements. 

A weaker rupee increases the domestic cost of bullion, which can influence household consumption and investment demand. With India among the world’s largest gold consumers, changes in precious metals prices tend to have a direct impact on inflation. 

Read More: Metal Stocks Swing After Budget 2026 as Global Cues Drive Volatility! 

Conclusion 

The RBI said that while core inflation remains contained, movements in gold and silver prices are now a more visible factor in shaping headline inflation. 

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