Bullion futures surge after duty hike

Gold and silver futures surged sharply on Wednesday after the government increased import duties on precious metals to 15%, triggering a rally in domestic bullion markets amid concerns over rising import costs.

 On the MCX, gold futures for June delivery jumped ₹9,723, or 6.34%, to ₹1,63,165 per 10 grams.  Silver prices also witnessed a strong rally, with the most-active July contract climbing ₹19,439, or 6.97%, to ₹2,98,501 per kg, nearing the ₹3 lakh mark.

  Traders attributed the sharp spike in domestic bullion prices to the government’s decision to raise customs duties on gold and silver from 6% to 15%.  The move comes as authorities attempt to curb precious metals imports amid a widening import bill linked to elevated crude oil prices and the ongoing West Asia conflict.

 The Finance Ministry, through a notification issued on Wednesday, increased the social welfare surcharge and agriculture infrastructure and development cess, taking the effective customs duty on gold imports to 15%. The revised rates came into effect from May 13.

  Analysts said the higher duties could moderate bullion imports in the near term and help contain pressure on India’s current account deficit. India’s gold imports surged over 24% to a record US$71.98 billion in 2025-26, although import volumes declined 4.76% to 721.03 tonnes during the year.  Global bullion markets, however, witnessed comparatively modest gains. Comex gold futures for June delivery rose US$21.40, or 0.46%, to US$ 4,708.10 per ounce, while silver gained 2.12% to US$87.40 per ounce. The sharper rise in Indian bullion prices compared to international markets reflected the immediate impact of the higher import duty on domestic trade and investor sentiment. 

Jewellers and bullion traders said the sudden spike in domestic prices could temporarily impact retail demand, especially ahead of the upcoming wedding season. Analysts expect increased volatility in bullion markets as investors assess the impact of higher duties and geopolitical tensions in West Asia.

—PTI