- Gold in Delhi fell about 20% since January, less than the 24% global drop
- India raised gold import duty from 6% to 15% in May, increasing local prices
- The rupee weakened 2% against the dollar since January, cushioning price falls
If you bought gold in Delhi at the peak in January, you are sitting on a smaller loss than someone who bought in London or New York on the same day.
Globally, spot gold ended at $4,068.71 an ounce on Friday. That is about 24% below the record close of $5,379 it hit on Jan. 29, 2026.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
In the national capital, 99.9% pure gold closed at Rs 1,46,300 per 10 grams on Dhanteras, according to the All India Sarafa Association. It had touched a record Rs 1,83,000 on Jan. 29. That works out to a fall of about 20%.
So where did the other four percentage points go? Two things changed in India between January and now, and a third thing that was propping up local prices in January has since disappeared.
Import Duty Went Up
When gold hit its record in January, India charged a 6% import duty on the metal. That changed on May 13, when the government raised the effective duty on gold and silver to 15%, made up of a 10% basic customs duty and a 5% agriculture infrastructure cess.
The move was meant to curb imports and ease pressure on the rupee and foreign exchange reserves, which had come under strain from higher oil prices. It came days after Prime Minister Narendra Modi asked citizens to avoid buying gold for a year.
For a buyer, the arithmetic is simple. Every ounce that lands in India now costs about 8.5% more than it would have under the old 6% duty, before the 3% GST is added at the counter. That alone absorbs a big chunk of the global fall.
Rupee Is Weaker
Gold is priced in dollars, so a weaker rupee pushes up the local price even if nothing happens in the global market.
The rupee was trading around 92 to the dollar on Jan. 29, when it touched what was then an all-time low. It slid much further after that, hitting a record low of 96.96 in May, before recovering. It closed at 93.905 on November 6, according to Reuters, down about 2% from where it stood on the day gold peaked.
That 2% is a smaller cushion than many buyers assume. Most of the rupee's damage was undone by the recent recovery, which came as oil prices eased and foreign inflows returned.
Then Why Isn't The Gap Even Wider?
Here is where it gets interesting. Run the numbers on the duty hike and the rupee alone, and Indian gold should be down only about 16% from its peak, not 20%.
The missing piece is the premium Indian buyers were paying in January.
In the run-up to the Union Budget, traders were convinced the government would raise import duties. They started charging a premium of up to $112 an ounce over official domestic prices on Jan. 21, Reuters reported. That was the highest since May 2014.
"Anticipating the hike, traders are charging premiums over record prices," Chanda Venkatesh, managing director of Hyderabad-based bullion merchant CapsGold, told Reuters at the time.
The Budget on February 1 left the duty unchanged. The hike came three and a half months later. By then the market had swung the other way. In the week after the May increase, dealers offered discounts of up to $207 an ounce, a record, as demand dried up and scrap supply rose.
By mid-October, things had normalised. Dealers were quoting a premium of up to $7 an ounce, now calculated on prices that include the 15% duty.
ALSO READ: Silver Price In Free Fall: Will 1 Kg Of White Metal Equal 10 Gm Of Gold Soon?
In other words, part of the January peak in India was a bet on a duty hike that had not happened yet. Once the hike was a fact and the excitement faded, that extra layer came off the local price. A premium of $112 on a metal trading near $5,000 is worth a little over 2% of the price, which accounts for much of the remaining gap. The rest comes down to timing and differences in how local prices are quoted.
What The Smaller Fall Means For Buyers
The cushion cuts both ways. A higher duty makes gold dearer in India, and it has hit volumes. The World Gold Council expects India's gold demand to fall to around 650 tonnes this year, the lowest since 2020. Sachin Jain, chief executive of the council's Indian operations, told Reuters that official imports also fell in the September quarter partly because unofficial inflows rose after the duty hike.
Shoppers are adjusting rather than walking away. Jewellers expected Dhanteras sales to rise in value this year, but not in weight.
"We are expecting flat growth in terms of volume compared to last year," Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council, told PTI ahead of the festival.
Even after the correction, gold in Delhi is still about 10% costlier than it was on Dhanteras last year, when it sold at Rs 1,32,400 per 10 grams.
Silver tells the same story
The pattern holds for silver too. Globally, silver was trading around $52 an ounce on November 6, roughly 57% below its January peak of $121.64. In Delhi, silver closed at Rs 1,92,500 per kg on Friday, down about 52% from its Jan. 29 peak of Rs 4,04,500.
Silver faced the same jump in import duty to 15% in May. The government also moved most silver bar imports into the restricted category, which means importers now need a licence.
ALSO READ: Why Silver Is Falling Three Times Faster Than Gold, And What It Means For Dhanteras Buyers
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.