Gold and Silver Prices Hit Upper Circuit After Import Duty Hike to 15%

Gold and silver prices jumped on Wednesday, 13 May, after the Indian government announced an increase in import duty on precious metals. The move triggered a strong jump in domestic bullion prices, while global markets also remained firm due to inflation concerns and geopolitical tensions.

As of 9.15 am, on MCX, silver prices hit the 6% upper circuit at ₹2,95,805 per kg. Gold prices also touched 6% upper circuit and climbed to ₹1,62,648 per 10 grams.

With today’s surge, gold prices are now trading near record highs in India, while silver prices crossed historic levels in several domestic markets. Globally too, precious metals remained strong as investors continued shifting toward safe-haven assets.

Spot silver rose 1% to $87.40 per ounce, while spot gold stood at $4,713.39 per ounce. US gold futures for June delivery gained 0.7% to $4,721.80 per ounce.

Indian Government Raises Import Duty to 15%

Silver and gold are up after the Centre raised import duty on gold and silver to 15% from the earlier 6%. The revised structure includes a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC).

The new rates came into effect from 13 May 2026 and will apply to gold, silver, platinum, jewellery findings, and precious metal-related industrial imports.

The government has also revised concessional duty rates on gold imported from UAE under the fixed-quantity quota system. In addition, import duty on jewellery findings such as hooks, clasps, clamps, pins, and screw backs has also been increased.

Why Did the Government Increase Duties?

The government’s main objective is to reduce rising imports of precious metals and protect India’s foreign exchange reserves.

India’s gold imports rose more than 24% to a record $71.98 billion in FY26 compared to $58 billion in FY25. Gold imports stood at $45.54 billion in FY24 and $35 billion in FY23.

According to commerce ministry data, gold now accounts for more than 9% of India’s total imports. Switzerland remains India’s biggest gold supplier with nearly a 40% share, followed by UAE 16% and South Africa 10%.

Higher imports have also increased pressure on India’s trade deficit and current account deficit. India’s trade deficit widened to $333.2 billion during FY26, while the current account deficit rose to $13.2 billion in December quarter, up from $11.3 billion a year earlier, as per RBI data released on 2 March.

PM Modi Appeals to Citizens to Avoid Gold Purchases

Due to growing concerns over forex reserves and import bills, on 10th May 2026, Prime Minister Narendra Modi urged citizens to avoid unnecessary gold purchases and reduce spending.

While addressing a public gathering in Hyderabad, Modi appealed to people not to buy gold for weddings for one year. He also asked citizens to use fuel carefully and avoid unnecessary foreign travel to help strengthen the country’s economic position.

Despite the appeal, demand for gold in India continues to remain strong because of weddings, festivals, and its traditional status as a safe-haven investment.

India is currently the world’s second-largest consumer of gold after China.

Global Factors Also Supporting Bullion Prices

Apart from India’s import duty hike, global factors are also supporting gold and silver prices.

Fresh US inflation data showed that consumer inflation rose to 3.8% year-on-year in April, mainly due to higher energy prices. After the data release, expectations of a US Federal Reserve rate cut were pushed further away, while the yield on the benchmark 10-year US Treasury note climbed to 4.47%.

Usually, higher interest rates reduce the appeal of gold because precious metals do not provide interest income. However, investors continued buying bullion due to uncertainty surrounding inflation and global geopolitical tensions.

The ongoing Iran conflict and concerns around the Strait of Hormuz have also kept commodity markets volatile. Any disruption in oil supply routes could increase inflationary pressure globally, which has further raised demand for safe-haven assets like gold and silver.

Impact on Jewellery Stocks and Gold & Silver ETFs 

Shares of listed jewellery companies remained under pressure on Wednesday as rising gold prices raised concerns over weaker consumer demand and lower discretionary spending.

As of 11:19 am on 13 May 2026, jewellery stocks were trading mixed:

• Titan Company — Down 0.46%

• Kalyan Jewellers — Down 5%

• Senco Gold — Up 1.14%

• PC Jeweller — Up 0.71%

• Sky Gold and Diamonds — Down 7%

• Thangamayil Jewellery — Down 6%

• Goldiam International — Up 0.18%

Jewellery stocks had already seen selling pressure earlier this week after Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases for a year to help conserve foreign exchange reserves.

Meanwhile, gold and silver exchange-traded funds (ETFs) rallied sharply after precious metal prices surged on the Multi Commodity Exchange (MCX).

Among the 25 gold ETFs, Quantum Gold Fund emerged as the top gainer, rising nearly 15% to an intraday high of ₹143.37 from its previous close of ₹124.90. Tata Gold ETF advanced 12%, while Zerodha Gold ETF gained around 9% as of 9:16 am on 13 May 2026.

Conclusion

Gold and silver prices surged after the government raised import duty on precious metals to 15%, pushing both metals near record highs in India. Rising US inflation and Middle East tensions are also supporting global bullion prices. Analysts expect gold and silver to remain volatile in the coming weeks amid ongoing economic and geopolitical uncertainty.