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Gold Is the New Oil? RBI Governor Says It’s Emerging as the Gauge of Global Uncertainty
New Delhi, October 4, 2025: Reserve Bank of India (RBI) Governor Sanjay Malhotra has drawn attention to a shifting global trend, stating that gold is gradually taking over crude oil’s role as the main barometer of uncertainty. Addressing the Kautilya Economic Conclave 2025, he observed that despite rising geopolitical tensions and fiscal challenges, crude oil prices have remained largely stable, whereas gold has shown sharp movements that now mirror global risks.
Gold Replaces Oil as a Signal of Instability
According to Malhotra, earlier geopolitical conflicts or economic crises would immediately push crude oil prices higher. However, with economies around the world reducing their dependence on oil in GDP, that link has weakened. In contrast, gold prices are now reflecting the same volatility that oil once did, making it a clearer indicator of economic and political instability.
He also cautioned that a downturn in global equity markets could soon occur, as fiscal stress is becoming visible across most leading economies.
RBI’s Policy Outlook Amid Global Challenges
The remarks came shortly after the RBI left its repo rate unchanged at 5.5%, keeping a neutral policy stance. While acknowledging that the world economy has displayed more resilience than expected, Malhotra noted that the environment remains uncertain due to inflationary pressures, rising debt levels, and ongoing geopolitical conflicts.
Gold Maintains Strong Rally
In domestic markets, gold prices have continued their upward momentum, marking a seventh straight week of gains. On October 3, gold futures on the MCX slipped marginally by 0.52% to ₹1,16,960, while in global markets, spot gold traded at $3,851.99 per ounce, only slightly below the all-time high of $3,896.49.
Analysts link this rally to expectations of further US Federal Reserve interest rate cuts and uncertainty around the US government shutdown. Over the last 20 years, gold prices in India have risen nearly 1,200%, from ₹7,638 in 2005 to over ₹1,00,000 in 2025. So far this year, gold has delivered a 31% return, cementing its status as a safe-haven investment.
Implications for Investors: Gold vs. Oil
With oil trading in a tight range and gold hitting new highs, investors are increasingly turning to gold and silver as protection against volatility. The RBI Governor’s assessment strengthens the view that gold, not oil, is now the true benchmark of global uncertainty.
