26 March | Gold

India withdraws parts of gold monetization program as market dynamics change

India withdraws parts of gold monetization program as market dynamics change

The Indian government has discontinued key elements of its gold monetization scheme, which was designed to mobilize idle household and institutional gold reserves through interest-bearing deposits.

India's 2015 gold monetization scheme originally accepted deposits across three tenors: short-term (1–3 years), medium-term (5–7 years), and long-term (12–15 years). However, the Finance Ministry announced on Tuesday the discontinuation of medium and long-term deposit options, attributing the change to evolving market conditions and the program's operational effectiveness.

Banks will continue offering short-term gold deposits (1–3 years), provided these instruments maintain their commercial viability under the revised framework.

This policy change will decrease future government liabilities while reducing exposure to gold price volatility. Under the previous structure, banks covered interest payments for short-term deposits, while medium- and long-term deposit obligations were borne by the national budget.

Gold prices, historically regarded as a safe-haven asset during economic uncertainty, have surged over 15% year-to-date amid ongoing market volatility.

The Ministry confirmed all existing gold deposits will remain valid until maturity, according to a Reuters report.

Elena Dorokhina MarketCheese
Period: 30.06.2025 Expectation: 1800 pips
Silver to continue growth despite short-term correction
Today at 11:31 AM 61
Elizabeth_Kuzmicheva
Elizabeth_Kuzmicheva

Listed among the best MarketCheese authors
1st in the segments "Metals" and "Oil and gas"
Gold sell
Period: 13.06.2025 Expectation: 4000 pips
Gold to fall to six-month trend line at 3,280
Today at 10:07 AM 77
Period: 20.06.2025 Expectation: 100 pips
Sell SPX until it hits 5,970
Today at 07:54 AM 37
Period: 20.06.2025 Expectation: 600 pips
AUDCAD declines on monetary policy divergence
06 June 2025 62
Elizabeth_Kuzmicheva
Elizabeth_Kuzmicheva

Listed among the best MarketCheese authors
1st in the segments "Metals" and "Oil and gas"
Period: 13.06.2025 Expectation: 1500 pips
GBPUSD to continue updating 3-year highs
06 June 2025 97
Period: 18.06.2025 Expectation: 350 pips
Buying natural gas with target at 4.000 on expected increase in cooling demand
05 June 2025 107
Go to forecasts