India, Feb. 23 -- Finance Minister Nirmala Sitharaman on Monday said the government is closely monitoring the recent surge in gold and silver prices but signalled that the rally has not yet reached "alarming" proportions.

Speaking at a press briefing following a customary post-budget meeting with the Reserve Bank of India's central board of directors, Sitharaman attributed the volatility primarily to global factors rather than domestic overheating. She noted that while precious metals are a favoured investment for Indian households, the current price action is largely driven by aggressive accumulation by central banks worldwide.

"The spike is largely due to central banks also buying and storing," Sitharaman told reporters. "For our dome...