Gold rate today: MCX jumps 6% after duty hike

Policy shock hits India’s bullion market

Gold prices moved sharply higher in India on May 13, 2026 after the Centre raised customs duties on gold, silver and platinum as an emergency measure to ease pressure on foreign exchange reserves during the ongoing West Asia crisis. The duty hike landed at a time when global bullion was already firm amid geopolitical uncertainty, volatile crude oil markets, and safe-haven demand. Because India meets nearly all its gold demand through imports, the cost impact is immediate for traders, jewellers, and retail buyers. The jump was visible first in futures, then in spot rates across major cities as local premiums adjusted. The government’s intent, according to the finance ministry communication cited in the report, is to curb precious metals imports, narrow the trade deficit, and support the rupee. Market participants, however, flagged the risk that higher duties can revive illegal inflows.

What the government changed from May 13

The Centre increased the effective import duty on gold and silver to 15% from 6%, with the revised rates taking effect from midnight. The revised structure combines a 10% basic customs duty (BCD) with a 5% Agriculture Infrastructure and Development Cess (AIDC), lifting the overall tax burden on imports. Platinum imports were also raised, with a 15.4% levy mentioned in the update. A separate reference in the update also described the move as doubling the import duty from 5% to 10% via a May 12 notification, effective from midnight of May 13, aligning with the 10% BCD component of the revised structure. The notification is cited as Customs Notification No. 16/2026. Duties were also raised on jewellery findings and certain precious metal-related industrial imports. Under the update, jewellery findings in gold and silver attract 5% customs duty, while platinum findings attract 5.4%.

MCX gold and silver surge over 6%

Bullion futures reacted immediately once the new duty structure came into force. MCX gold futures for June 2026 delivery were reported up by about 6% in early trade, with multiple price points cited during the session including ₹1,62,334, ₹1,62,648, ₹1,62,727 and ₹1,63,165 per 10 grams. In one snapshot, gold was up 6% from the previous close of ₹1,53,442 to trade near ₹1,62,621 per 10 grams. MCX silver futures for July 2026 delivery rose roughly 6% to 6.97% across the cited updates, trading around ₹2,95,805 to ₹2,98,501 per kilogram. One update noted silver’s move as nearly 7%, pushing it close to the ₹3 lakh per kilogram mark. Traders attributed the rise primarily to the higher import tax feeding directly into domestic pricing. The update also flagged that elevated prices could weigh on consumer demand, especially in jewellery.

Spot gold rates: per gram levels in focus

Alongside the futures spike, the update listed all-India per-gram prices for retail reference. Gold was cited at ₹15,399 per gram for 24 carat, ₹14,116 per gram for 22 carat, and ₹11,550 per gram for 18 carat. The report also noted that 10 grams of 24K gold crossed ₹1.53 lakh and that 100 grams of 24K gold rose to ₹15.39 lakh, consistent with the per-gram figure quoted. Another passage in the update cited 24K gold around ₹15,475 per gram at the time of filing, reflecting intraday variation across sources and timestamps. These levels reflect a mix of global cues and the step-up in import costs due to the duty change. For buyers, the impact is typically higher once GST, making charges and jeweller margins are added. The update specifically cautioned that the duty-linked increase is before adding 3% GST and other costs.

Why the Centre acted: forex, rupee and the trade deficit

The duty hike was framed as a macro-stability step to reduce dollar outflow on non-essential imports as geopolitical risk pushed India’s import bill higher. The update linked the decision to pressure on forex reserves and noted that the rupee touched an all-time low of 95.75 per US dollar in the reported context. With India importing nearly all the gold it consumes, higher import duties directly raise landed costs and can slow import volumes. The update also noted that Prime Minister Narendra Modi had appealed to citizens to defer gold purchases for a year to help conserve foreign exchange. Officials and market participants described the intent as curbing precious metals imports, narrowing the current account gap, and supporting the rupee. But the report also acknowledged that demand for gold as an investment has grown amid rising prices and weak equity returns over the past year.

ETFs rally as bullion-linked products reprice

Gold and silver exchange-traded funds (ETFs) moved sharply higher after the duty-driven spike in MCX prices. One update said gold and silver ETFs rallied as much as 15% on Wednesday, while another snapshot around 10:10 AM showed gold ETFs up roughly 4% to 6.5% and silver ETFs up about 5% to 6%. The report listed several schemes among gainers, including Union Gold ETF, Axis Gold ETF, HSBC Gold ETF, Kotak Gold ETF, Tata Gold ETF, Nippon India ETF Gold BeES, and multiple silver ETFs across fund houses. The rally reflected the immediate repricing of domestic bullion and the broader risk-off tone linked to geopolitical developments. The update also cited World Gold Council data: inflows into India’s gold ETFs rose 186% year-on-year in the March quarter to a record 20 metric tonnes. That context mattered because it suggested investors were already increasing exposure through financial products even before the duty shock.

Demand impact: jewellery caution, investment trend intact

The update carried comments suggesting the duty hike is likely to have a short-term impact on physical demand, particularly jewellery, due to higher retail prices and official messaging to curb bullion buying. Jateen Trivedi, VP Research Analyst for commodity and currency at LKP Securities, said the increase is a one-time effect on gold and silver and may soften physical demand in the near term. He added that the broader rally in precious metals continues to be driven by global factors such as geopolitical uncertainty, inflation risks, central bank policy, currency weakness and safe-haven demand. Separately, Hareesh V Nair, head of commodity research at Geojit Investments, said a mild temporary decline in demand is possible, but the longer-term demand outlook may not change materially, referencing earlier periods when duty was at 15%. These views align on one key point in the update: the policy action changes domestic pricing quickly, but global drivers still influence direction.

Smuggling risk returns to the discussion

Industry participants cautioned that steeper import taxes can reopen incentives for illegal inflows, particularly when duty gaps widen. The update noted that smuggling networks had weakened after tariff cuts in mid-2024, and that the current rise could revive unofficial channels. Surendra Mehta, national secretary of the India Bullion and Jewellers Association, said the increase was largely expected as the government seeks to contain the current account deficit, while also warning that elevated prices can impact consumer demand. The update also mentioned operational strain in the system: the revised tax mechanism reportedly locked up working capital for banks, leading some lenders to temporarily halt fresh gold imports. As a result, India’s gold imports for April were estimated at 15 tonnes, among the lowest monthly levels in nearly three decades outside the Covid period, according to the update.

Key levels on MCX cited by the market

Beyond the headline move, the update also provided near-term technical zones cited by market watchers. Gold was seen finding support between ₹1,52,800 and ₹1,52,100, with resistance in the ₹1,54,000 to ₹1,54,850 range. For silver, support was cited at ₹2,74,400 to ₹2,70,700, with resistance estimated between ₹2,83,000 and ₹2,88,000. These levels were presented in the update as reference points for traders watching volatility after the policy change. They reflect how quickly sentiment shifted once the new duty structure took effect. The same update also noted that elevated prices may further impact consumer demand.

Snapshot of the main facts

What to watch next

The duty hike is already feeding into higher domestic bullion prices, while the update suggests demand may soften in the near term as consumers adjust to elevated retail rates. Attention will remain on import trends, local premiums, and whether higher duties shift more buying toward ETFs and other paper-gold products. The government’s stated objective is to curb non-essential imports and protect forex reserves, and the market will track any follow-up steps tied to the external situation and the rupee. Industry bodies have also highlighted the need to watch for any rise in illegal inflows if price differentials widen. For now, the key confirmed development is the sharp reset in domestic bullion pricing after the 15% effective duty took effect on May 13.