Gold prices are once again in the spotlight. This time, the trigger is a sharp policy move. The government has increased the import duty on gold and silver from 6 percent to 15 percent. As a result, the market reacted immediately.
Gold prices surged over 7 percent on MCX. At the same time, silver witnessed a massive jump of more than ₹17,000 per kilogram. Clearly, the impact is strong and immediate.
This decision comes just days after Prime Minister Narendra Modi urged citizens to reduce unnecessary gold purchases. The move aims to cut imports. It also seeks to support the rupee, which has been under pressure.
Why Gold Prices Are Rising
Experts believe the duty hike will push gold prices even higher. According to industry estimates, prices may rise by nearly ₹27,000 per 10 grams. That is a significant increase.
However, the move has two sides. On one hand, it may reduce demand in India. On the other, it can help control the trade deficit. Since gold imports form a large part of India’s import bill, this step could support the economy.
Still, concerns remain. Industry leaders warn that higher taxes may encourage smuggling. In fact, similar trends were seen in the past when duties were high. This could lead to a parallel market.
Meanwhile, gold prices continue to hold their safe-haven appeal. During uncertain times, investors often turn to gold. However, experts now suggest alternatives. Digital gold and ETFs are gaining attention due to lower risk and better liquidity.
Silver is also making headlines. Prices have risen nearly 15 percent in a week. Interestingly, this rise is driven more by market sentiment than supply issues. Global factors, including developments in the US and Iran, are also influencing trends.
Despite the surge, analysts do not see a major supply shock. Silver has large above-ground reserves. Therefore, demand plays a bigger role in price movement.
In the coming weeks, volatility may remain high. But one thing is clear. Gold prices and silver trends will continue to stay in focus.
