Gold prices soar after duty hike — should you buy, hold or rebalance? Expert says, ‘good time to…’

The government on Wednesday hiked import duties on gold and silver to 15% from 6% in a bid to curb non-essential imports of precious metals and ease pressure on foreign exchange reserves amid the West Asia crisis.

India, the world’s second-largest gold consumer after China, relies heavily on imports to meet jewellery demand. Gold imports rose over 24% to a record $71.98 billion in 2025-26, although import volumes fell 4.76% to 721.03 tonnes.

The duty hike is expected to make bullion imports costlier, pushing up jewellery prices and investment demand. Analysts warn it could revive smuggling, while others see opportunities for investors.

How is gold priced today?

Following the hike, the price of gold increased by ₹1,500, or nearly 1%, to ₹1,56,800 per 10 grams in Delhi on Tuesday from Monday's closing level of ₹1,55,300 per 10 grams. Silver prices also advanced by ₹12,000, or 4.53%, to ₹2,77,000 per kg.

On Wednesday, 24-carat gold was priced at ₹161,110/10 gm in the national capital, according to data on the Indian Bullion Association (IBA). Further, 22-carat gold was priced at ₹147,684/10 gms. Silver prices today are at ₹296,030/kg (Silver 999 Fine), as per the IBA website.

In the international market, spot gold slipped $42.33, or 1%, to $4,692.64 per ounce while silver fell 3.04% to $83.49 per ounce.

How will it impact your investments and jewellery?

Since India imports most of its gold, higher duties increase the cost of bringing the metal into the country. This could push domestic gold prices even higher, regardless of global price trends.

The move may also weaken jewellery demand as gold prices are already high. Demand for gold coins and ETFs could slow if prices keep rising.

Higher domestic premiums mean gold in India could trade at much higher prices than in global markets.

Is this a good time to rebalance portfolio?

Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors, sees this as an opportunity to rethink gold investments and rebalance the portfolio.

“With gold prices rising sharply over the past few years, many investors who already hold gold may now be overweight on the asset class. This could be a good time for them to rebalance and streamline their portfolios.”

“At the same time, investors who remain underweight on gold can still consider adding exposure, but in a balanced and disciplined manner.”

How did the news impact jewellery stocks?

Jewellery stocks faced selling pressure for the third day running on Wednesday, with Sky Gold dropping over 11%, amid fears of reduced demand due to import duty hikes.

Shares of Sky Gold and Diamonds tumbled 11.11%, Kalyan Jewellers dropped 6%, Senco Gold tanked 4.30%, PC Jeweller edged lower by 3.65%, Tribhovandas Bhimji Zaveri declined 1.74%, and Titan Company dipped 1.64% on the BSE.

How did gold and silver futures react to the import duty hike?

Gold prices rallied by ₹9,723 to ₹1.63 lakh per 10 grams in futures trade on Wednesday, while silver soared 7% to approach the ₹3 lakh per kg mark after the hike.

On the Multi Commodity Exchange (MCX), gold futures for the June delivery appreciated by ₹9,723, or 6.34%, to ₹1,63,165 per 10 grams. Silver prices also witnessed a sharp rally, with the most-traded July contract jumping by ₹19,439, or 6.97%, to ₹2,98,501 per kg on the MCX.

In 2022, India raised the gold import tax to 15% to curb CAD (capital account deficit) amid a falling rupee due to the Russia-Ukraine war, which began in February 2022.

How did jewellery market react?

"Business is now going to become difficult on the back of the Prime Minister's austerity measures and following the import duty hike in bullion. What the industry fears is that this will give rise to a grey market, smuggling is likely to grow, setting up a parallel economy in the country," All India Gems and Jewellery Council chairman Rajesh Rokde told PTI.

Explaining the duty hike, Rokde said the import duty, including Customs Duty, GST and Agricultural Cess, will make gold costlier by around ₹27,000 per 10 grams, from the earlier ₹13,500/10 gm.

Meanwhile, jewellery retailer Senco Gold and Diamonds MD and CEO Suvankar Sen said the import duty would remain high till the West Asia crisis remains. "So maybe for around one year it shall stay at these levels. The volumes might get impacted by 10-15%, but value-wise, it will remain at a higher level. Consumers will buy lighter-weight jewellery," he added.