Could gold prices in India fall below ₹1L?
What's the story
Gold prices in India peaked at ₹1,80,779 per 10g in January 2026 but have since fallen to ₹1,56,200. The decline comes as market experts say the gold price rally is losing steam due to reports of Russia resuming trade in US dollar with the US. A Bloomberg report cites a Russian international document indicating that the Kremlin is considering an economic partnership with the US. So, can gold prices fall to ₹1 lakh? Let's find out.
Trade shift
BRICS nations' de-dollarization efforts at risk
The report highlights Russia's possible return to dollar trade settlement, a move that could significantly undermine the BRICS nations' de-dollarization efforts. The BRICS bloc, which includes Brazil, Russia, India, China and South Africa, has been stockpiling gold to replace the US dollar in their trade settlements. However, if Russia returns to using the US dollar for trade settlements with the US, it could have a detrimental effect on both de-dollarization and gold prices.
Expert opinions
Possible end to Russia-Ukraine war could influence dollar trade
Amit Goel, Chief Global Strategist at PACE 360, said the report indicates a structural shift in geopolitical alignment. He suggested that Russia's possible return to dollar trade settlements with the US could be a response to an end of the Russia-Ukraine war and indicate a potential peace deal. The lack of rebuttal from Moscow on such sensitive matters could also signal this shift.
Market dynamics
Central banks' gold purchases driving prices
Anuj Gupta, a SEBI-registered market expert, emphasized the role of central banks in fueling the gold price rally. He said since Donald Trump's presidency began in 2025, global central banks have been aggressively buying gold to counter Trump's tariffs. This has created a major demand-supply imbalance leading to higher prices. The possible halt in these central banks' gold purchases or their potential selling could significantly impact gold prices negatively.
Gold strategy
BRICS nations ramping up gold production
Despite officially holding about 20% of global gold reserves, BRICS nations and their strategically allied states now account for about 50% of global gold production. China produced 380 tons of gold in 2024 while Russia contributed 340 tons. In September 2025, Brazil bought 16 tons of gold marking its first purchase since 2021. Anuj Gupta explained that these countries are producing more gold but selling less while also buying from the international market.
Economic influence
Structural shift in demand-supply dynamics expected
BRICS economies now account for almost 30% of global trade, giving their collective monetary choices global relevance. However, Russia's return to the dollar could jeopardize the bloc's long-standing objective of de-dollarization. Amit Goel expects a structural shift in demand-supply dynamics of gold prices due to this development. He said gold rates in India could fall below ₹1 lakh per 10g, while COMEX gold prices could touch $3,000 per ounce by end-2027.