Will Govt Stabilise Volatile Gold, Silver Prices? Finance Ministry Responds
"The prices of precious metals are determined by the market... and the government is not involved in the price fixation," Minister of State for Finance Pankaj Chaudhary said.
Gold and silver, the dearest of all the precious metals have gotten dearer in the past few years. Often viewed as safe haven assets and reliable hedges against the crest and troughs of the stock market, both metals have touched new-highs multiple times in this year itself leaving lesser and lesser room for common people to afford them.
In the Parliament, the Finance Ministry was asked on whether the government is mulling over any measure to stabilise the gold and silver prices. In its reply, the ministry clarified that the prices of precious metals are determined by the markets, and the government has no role in fixing the prices.
"The prices of precious metals are determined by the market... and the government is not involved in the price fixation," Minister of State for Finance Pankaj Chaudhary said.
However, it added that as a relief measure, the government had lowered customs duty on gold imports from 15% to 6% in July 2024.
Moreover, measures such as Gold Monetization Scheme or GMS, Gold exchange‑traded funds or ETFs and Sovereign Gold Bond Scheme were introduced to reduce the demand for physical gold and to mobilise idle domestic gold.
According to the ministry, this was also done "so that part of demand is met from local stocks rather than fresh imports, thereby reducing external vulnerability and price pressures".
India's half yearly gold imports for FY26 stood at 2,99,768 kgs, amounting up to $26,514.46 million while silver imports as of September stood at 28,20,728 kgs, amounting up to $3,219.17 million, according to data by Directorate General of Commercial Intelligence and Statistics.
In the last financial year, India had imported 7,57,093 Kgs of gold amounting up to $58,006.37 million and 51,64,372 Kgs of silver amounting to $4,827.25 million.
The Finance Ministry noted that the RBI and government regulation of bullion imports through nominated agencies, banks and refineries helps in improving traceability, reducing grey‑market channels and facilitates a smoother tracking of global benchmarks for domestic price reactions, in the face of reactions to shortages or speculative spikes.
The ministry emphasised that the recent surge in prices is primarily attributable to intensified geopolitical tensions and uncertainty over global growth. This has boosted safe-haven demand, ultimately leading to substantial gold purchases by central banks and major institutions worldwide.
