Gold and Silver May Turn Cheaper After Budget 2026
Buying gold and silver could soon become easier on the pocket. Ahead of the Union Budget 2026, scheduled for February 1, the government is considering a reduction in customs duty on gold and silver from 6% to 4%. If announced, gold prices may drop by nearly ₹3,000 per 10 grams, while silver prices could decline by around ₹6,000 per kilogram.
At present, in January 2026, 24-carat gold is trading at around ₹1,68,475 per 10 grams, while silver is priced at approximately ₹3,57,163 per kg. A duty cut could bring short-term relief to consumers and investors amid record-high commodity prices.
Why Gold and Silver Prices Rose Sharply in 2025
Gold and silver delivered exceptional returns last year. In 2025, gold prices surged nearly 75%, while silver jumped a massive 167%. Experts point to multiple global and domestic factors behind this rally:
Global tensions and wars: Rising geopolitical risks pushed investors towards gold as a safe-haven asset.
Weak US dollar: Rate cuts by the US Federal Reserve weakened the dollar, making dollar-priced commodities like gold and silver more attractive.
Central bank buying: Global central banks crossed 32,140 tonnes of gold reserves by December 2025, supporting prices.
Industrial demand for silver: Over 50% of silver is used in solar panels, EV batteries and semiconductor chips.
Limited mining supply: Demand rose faster than supply, creating a shortage.
Will Budget 2026 Duty Cut Impact Gold Prices?
Currently, gold attracts a total tax of about 9%, including import duty and GST. According to experts, reducing the import duty on gold could help curb smuggling and narrow the gap between international and domestic prices. In the July 2024 budget, a similar duty cut boosted jewellery demand by nearly 10%.
However, analysts caution that the impact may be temporary. International market trends play a bigger role in determining long-term gold prices.
Should You Invest in Gold and Silver Now?
Market experts advise investors not to rush into bulk purchases before the budget. Naveen Mathur of Anand Rathi suggests a “buy-on-dips” strategy, while Motilal Oswal’s Navneet Damani expects high volatility in early 2026 but remains positive on the long-term outlook.
Two popular ways to invest:
Physical gold and silver: Coins and bars from trusted sellers.
Gold and Silver ETFs: Safer, digital options with guaranteed purity.
Why This Matters Right Now
With Budget 2026 around the corner and commodity markets at elevated levels, any policy move can directly impact household savings, jewellery demand and green energy manufacturing. A duty cut could offer short-term relief and boost consumption.
Interestingly, Indian households hold nearly 34,600 tonnes of gold—worth about ₹348 lakh crore—highlighting the metal’s deep cultural and financial significance.
Bottom line: Keep an eye on Budget 2026 announcements, track global cues, and invest in gold and silver gradually rather than all at once.
