Gold and Silver Prices Hit Record Highs in 2026: Will Import Duties Push Prices Even Higher?
Gold and silver prices have entered uncharted territory in early 2026. From January itself, gold prices in India started hovering near record highs, driven by a powerful mix of global uncertainty, central bank buying, and strong domestic demand. At the same time, speculation is growing that the Union Budget 2026–27 may increase gold import duty India and silver import duty, a move that could further inflate domestic bullion prices.
For bullion traders, jewellers, and everyday investors, this combination of high global prices and possible policy changes has created a tense and uncertain environment. In this article, we break down the current situation of gold and silver prices in India, explain why the government is considering duty hikes, and explore the gold price forecast for 2026.
Current Situation of Gold and Silver Prices in India
As January 2026 draws to a close, gold and silver prices remain elevated both globally and domestically. International gold prices are trading near historic levels, hovering between $5,500 and $5,600 per ounce. This rally is not speculative in nature—it is driven by geopolitical tensions, persistent inflation fears, and aggressive gold accumulation by global central banks.
In India, prices are even higher due to strong local premiums. Bullion dealers are charging premiums of around $120 per ounce over international prices, the highest seen in nearly a decade. This premium reflects panic buying by consumers and investors who anticipate an increase in import duties in the upcoming budget.
Silver prices are also under pressure. Apart from investment demand, silver is seeing structural support due to its expanding use in electronics, electric vehicles, and solar panels. With India importing a large portion of its silver needs, higher global prices combined with local demand have pushed domestic silver prices sharply upward.
Why Gold and Silver Prices Are Rising So Rapidly
Gold prices have historically risen during periods of economic stress, but the recent surge has been unusually steep. The reasons go beyond short-term speculation.
Global economic uncertainty, rising sovereign debt, and currency depreciation fears have made gold the preferred hedge for institutions and central banks alike. At the same time, India’s cultural affinity for gold ensures that demand remains resilient even when prices are high.
Silver, often called “industrial gold,” is benefiting from a supply-demand mismatch. Industrial usage is growing faster than mine supply, which keeps prices supported even during market pullbacks.
Gold Import Duty India and Silver Import Duty: How It Works
India imports almost all of its gold and more than 80% of its silver. This makes gold import duty India and silver import duty powerful tools for the government to control prices, demand, and the trade deficit.
Currently, the total customs duty on both gold and silver stands at 6%, which includes Basic Customs Duty and Agriculture Infrastructure and Development Cess. This was reduced from the earlier 15% duty in mid-2024 to curb smuggling and stabilize the domestic bullion market.
However, customs duties are ultimately passed on to consumers. When duties increase, wholesale and retail prices rise almost immediately, making gold and silver more expensive across jewellery, bars, and coins.
Previous Import Duty Changes and Their Impact
Over the last five Union Budgets, import duties on precious metals have been adjusted frequently, reflecting the government’s balancing act.
In earlier years, duty hikes were used to manage currency pressure and reduce imports, while reductions aimed to curb smuggling and normalize the market. Despite these efforts, gold and silver imports surged again in 2025. Gold imports crossed $58 billion, while silver imports jumped sharply, driven by industrial demand.
This renewed surge has brought import duties back into policy focus ahead of Budget 2026–27.
Why India Is Considering Increasing Import Duties in 2026
The push to raise gold and silver import duties is rooted in macroeconomic pressure. In 2025 alone, bullion imports accounted for nearly $10 billion, adding stress to India’s trade deficit and weakening the rupee.
From a policymaker’s perspective, gold and silver imports—largely for investment and jewellery—do not directly contribute to productive economic growth during high-inflation periods. Increasing import duties is seen as a way to suppress demand, conserve foreign exchange, and stabilize the currency.
However, history shows that demand for gold in India is relatively inelastic. Higher duties often lead to unintended consequences such as increased smuggling or a shift toward alternative investment routes.
How Higher Gold Import Duty Can Push Prices Even Higher
Ironically, increasing gold import duty India or silver import duty often results in higher domestic prices rather than lower demand.
When duties rise, importers pass the additional cost down the supply chain. This raises wholesale prices, retail jewellery prices, and even premiums on coins and bars. As a result, Indian gold prices can rise even if global prices remain stable.
In anticipation of such hikes, investors also front-load purchases, pushing prices higher before the policy even takes effect. This expectation-driven rally is already visible in early 2026.
Impact on the Bullion Market in India
India’s bullion market is diverse, spanning jewellery, physical bars and coins, digital gold, and ETFs. A duty hike could reshape this ecosystem in several ways.
Physical gold may become less attractive due to higher prices and premiums, while paper gold instruments such as gold ETFs could see increased inflows. In fact, gold ETFs recorded explosive growth in 2025, reflecting a clear shift in investor behaviour.
Jewellery demand, especially during wedding and festival seasons, may soften temporarily, but India’s cultural attachment to gold ensures that long-term demand remains intact.
Gold Price Forecast for 2026: What Should Investors Expect?
The gold price forecast for 2026 remains cautiously optimistic. On the global front, central bank buying and geopolitical uncertainty continue to support elevated prices. Any significant correction appears unlikely unless there is a major improvement in the global economic outlook.
Domestically, a potential import duty hike could push Indian gold prices 5–10% higher, even without a global rally. While demand may dip slightly, especially in jewellery, price declines are expected to be limited.
If duties remain unchanged—or are unexpectedly reduced—domestic prices could see short-term relief. However, with global prices already near record levels, a sharp fall in Indian gold prices appears unlikely.
Final Thoughts: Gold’s Role in 2026 and Beyond
Gold has always served as a hedge against uncertainty, inflation, and currency risk. In 2026, that role is more relevant than ever. While higher import duties may temporarily disrupt demand patterns, they are unlikely to break India’s long-standing relationship with gold.
For investors, the focus should remain on long-term allocation rather than short-term price movements. Whether through physical gold, ETFs, or digital platforms, gold is likely to remain a core asset until global economic stability returns.
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