Gold Prices Could Rebound 30–40% in the Next Six Months, Says Gold Guru Santhakumar

Gold prices are likely to recover and could rise by 30–40% over the next six months, according to Gold Guru Santhakumar, State General Secretary of the Gold and Jewelry Merchants Association. He believes the recent decline in prices is a temporary correction driven by global geopolitical developments and changing economic conditions.

Speaking in an interview, Santhakumar said gold remains one of the world`s most sensitive investment assets, responding quickly to wars, geopolitical tensions, central bank policies, and economic uncertainty. While prices have softened in recent months, he expects the market to regain momentum as global conditions stabilize.

He noted that the recent price correction was influenced by developments surrounding the ceasefire announcement involving the United States and Iran. However, he cautioned that future geopolitical events, US Federal Reserve interest rate decisions, and policy announcements from US President Donald Trump would continue to influence global gold prices.

Gold Monetization Scheme 2.0 Needs Reforms

Commenting on the proposed Gold Monetization Scheme (GMS) 2.0, Santhakumar described it as a positive initiative but stressed that its success would depend on practical reforms that build public confidence.

India imports nearly 800 tonnes of gold every year despite having virtually no domestic gold production, resulting in a significant outflow of foreign exchange. At the same time, Indian households are estimated to hold between 35,000 and 40,000 tonnes of gold, much of which remains idle.

He said that if even 10% of this unused gold were brought under the Gold Monetization Scheme, India could significantly reduce its dependence on gold imports for several years.

Santhakumar suggested that the scheme should primarily encourage deposits of gold coins and bullion rather than jewellery, as families are emotionally attached to their ornaments and are unlikely to melt them for investment purposes.

He also recommended increasing the interest rate offered on deposited gold from the current 2% to at least 3%, making the scheme more attractive for investors.

Address Public Concerns

According to Santhakumar, concerns about scrutiny by the Income Tax Department remain one of the biggest obstacles to the scheme`s success. He urged the government to assure depositors that genuine participants would not face unnecessary questioning regarding the source of their gold if they joined the scheme within the prescribed policy framework.

He believes that such confidence-building measures would encourage more households to bring their idle gold into the formal financial system.

Lessons from the 2015 Scheme

The original Gold Monetization Schememe, launched in 2015, failed to meet expectations. Despite an estimated 30,000 tonnes of gold being held by Indian households at the time, only 39 tonnes were mobilized under the scheme.

Santhakumar attributed the poor response to strict regulations and procedural complexities. With simplified rules, higher returns, and improved public confidence, he believes the revised scheme has the potential to achieve far greater participation.

Concluding his remarks, Santhakumar said that a well-implemented Gold Monetization Scheme 2.0 could help unlock India`s vast idle gold reserves, reduce import dependence, conserve foreign exchange, and strengthen the country`s long-term economic growth. He also advised investors to remain optimistic about the medium-term outlook for gold prices.