Gold, long considered a safe-haven asset and a cultural cornerstone in countries like India, may soon slip out of reach for retail investors. A combination of macroeconomic shifts, geopolitical tensions, and changing global monetary dynamics is driving a structural bull case for gold—one that could push prices to unprecedented levels.

According to Ritesh Jain, Founder of Pinetree Macro, the trajectory of gold prices is increasingly disconnecting from income growth, particularly in emerging markets. “If you just look at how gold has moved in the last couple of years, both in USD and INR terms, incomes have not kept pace. Real purchasing power hasn’t improved globally,” he said.

This widening gap between gold prices and household incomes is already visible on the ground. Consumers are gradually shifting away from high-purity gold. “You are already seeing people moving from 24 karat to 22, even 16 or 12 karat gold. Pure gold is becoming unaffordable for the common man,” Jain noted.

On April 29, gold prices opened marginally higher on the Multi Commodity Exchange (MCX), with investors awaiting cues from US Federal Reserve Chair Jerome Powell. Markets remain focused on the potential economic fallout of the Iran conflict, especially as diplomatic efforts show little progress. On the domestic front, MCX gold futures for June 2026 delivery remained largely steady at ₹1,50,096 per 10 grams, after the metal ended the previous session on a muted note.

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Gold demand

Unlike previous cycles driven largely by retail and jewellery demand, the next phase of gold’s rally may be dominated by institutional buyers—particularly central banks and sovereign entities.

Jain believes that central banks will play a decisive role in pushing gold prices higher. “Ultimately, the buyers of gold will be central banks and sovereign wealth funds. They are the ones with the purchasing power,” he explained.

This shift is rooted in declining confidence in traditional reserve assets like the US dollar and Treasury securities. With rising fiscal deficits and changing geopolitical alignments, countries are increasingly looking for neutral reserve assets.

“Why would countries want to hold US Treasuries when there are concerns around fiscal sustainability and global trade dynamics? That’s why central banks are accumulating gold,” Jain said.

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Trade settlement asset

A more transformative trend is emerging in global trade: the potential use of gold as a settlement mechanism.

Jain points to a growing ecosystem of gold vaults and infrastructure being developed across regions like China, the Middle East, and along trade corridors such as the Belt and Road Initiative. “Countries may prefer settling trade in gold rather than holding another country’s currency. That changes the entire demand dynamics,” he said.

In such a system, gold demand would no longer be discretionary but structural—driven by trade flows rather than investment sentiment.

Price targets

Jain’s outlook is particularly striking when it comes to future price levels. “If we go by historical analogues, gold at $8,000 to $9,000 per ounce is not out of the question over the next 3–5 years,” he said.

At such levels, retail participation could shrink dramatically. The incremental demand required to push gold from current levels to those extremes is unlikely to come from households. “Who will be the incremental buyer when incomes are stagnant and prices are soaring? It won’t be retail investors,” he added.

Retail Investors

For countries like India and China—where gold demand is deeply tied to savings and cultural practices—the implications are significant. Jewellery demand may persist for essential occasions like weddings, but purity and volumes are likely to decline.

In the long term, gold could transition from a widely held household asset to a more institutionally dominated reserve asset. Retail investors may increasingly access gold through financial instruments such as ETFs or sovereign-backed schemes rather than physical ownership.

The broader message is clear: gold’s next rally may not just be about higher prices—it could fundamentally reshape who can afford to own it.

Published on: Apr 29, 2026 12:38 PM IST