Truthfully the saying is real "Real gold is not afraid of the melting pot. But my wallet is afraid of the jewelry shop."

Gold prices have increased sharply after the import duty hike. 22-carat gold has increased by Rs 1,275 per gram at once. The price of a pound has also increased by Rs 10,200. With this, 22-carat gold has become Rs 1,23,220 per pound today. Currently, the highest gold price of this month has been recorded today.

Gold prices in India have seen a massive surge today, May 13, 2026, primarily driven by a significant hike in import duties.  

Domestic prices spiked by approximately 6-7% immediately following the government's announcement.  

• 24K Gold: Approximately ₹16,789 per gram (crossing ₹1.67 lakh per 10 grams).  

• 22K Gold: Approximately ₹15,390 per gram (up by over ₹1,200 from yesterday).  

The sharp increase is almost entirely due to a major policy shift by the central government:

1. Hike in Import Duty: The effective import duty on gold and silver has been more than doubled, jumping from 6% to 15%. This includes:  

• 10% Basic Customs Duty (up from 5%).  

• 5% Agriculture Infrastructure and Development Cess (AIDC) (up from 1%).

2. Conserving Foreign Exchange: Prime Minister Narendra Modi recently appealed to citizens to avoid buying gold for a year. The duty hike is a mechanical step to reduce the massive dollar outflow spent on gold imports (which hit a record $71.98 billion in 2025-26).  

3. Supporting the Rupee: The Indian Rupee has been under pressure, recently touching new lows. By discouraging gold imports, the government aims to narrow the trade deficit and stabilize the currency.  

4. Global Geopolitical Tensions: Ongoing conflicts in West Asia (Middle East) have kept global bullion prices elevated and increased the risk to India’s external finances due to rising crude oil costs.  

Impact on Consumers and the Market

• Jewellery Costs: Retail prices for jewellery will see an immediate and sharp increase. Beyond the base price, the 3% GST and making charges will now be calculated on a much higher landed cost.  

• Shift in Buying Habits: Industry experts predict a 10-20% drop in demand. Jewellers are expected to pivot toward "lighter weight" designs and lower-carat options to maintain affordability.

• Smuggling Risks: There are concerns within the industry that a 15% duty may revive illegal gold smuggling, which had significantly decreased after the tariff cuts in 2024.  

• Investment Surge: While physical demand might slow, gold-linked financial products like Gold ETFs saw a rally of up to 15% today as investors reacted to the new duty structure.

Karl Marx said decades ago~ “Although gold and silver are not by nature money, money is by nature gold and silver.”

Dr.Mathew Joys