Gold prices recorded significant gains on Wednesday, with domestic futures surpassing the ₹1.63 lakh mark on the Multi Commodity Exchange (MCX). This surge was fueled by geopolitical tensions, a record low for the Indian rupee, and ongoing safe-haven buying. MCX Gold opened sharply higher and traded above ₹1,63,000 after breaking out of a medium-term consolidation range, while COMEX Gold remained steady in the $4,700-$4,730 per ounce range.
The rally in domestic bullion prices was further bolstered by the Indian government’s increase of the total import duty on gold and silver to 15 percent from the previous 6 percent. Market analysts noted that this higher levy could push local prices even higher, despite ongoing volatility in international bullion markets.
Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza, stated that the import duty increase directly elevates the landed cost of bullion in India, which imports most of its gold and silver. He explained that both MCX gold and silver prices responded sharply, with domestic bullion trading at a more significant premium over international COMEX and LBMA prices. Futures contracts adjusted quickly to account for the newfound cost structure.
“MCX pricing is generally calculated as: International Price + USD/INR + Import Duty + Taxes + Premium. Therefore, even if COMEX gold remains stable, a customs duty hike alone can elevate MCX prices,” Yadav remarked. He cautioned that while higher prices might induce some profit-taking and decrease demand in the short term, domestic premiums and arbitrage opportunities between MCX and COMEX are likely to remain high. In the medium term, although a raise in customs duty may reduce formal bullion imports and support the rupee and current account deficit, it could also heighten the risk of smuggling.
The rupee fell by 32 paise, closing at an unprecedented low of 95.63 against the US dollar after fluctuating between 95.43 and 95.74 during the day. Analysts predict that the currency may continue to weaken, trading within the 95.45-95.90 range, driven by enduring dollar demand and geopolitical uncertainties.
Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment Managers, commented, “The duty hike is a rational short-term measure, but it risks being a policy that appears effective on paper while failing in practice.”
Internationally, sentiment remained cautious following the release of US April consumer price inflation, which came in at 3.8 percent year-on-year, exceeding expectations of 3.7 percent. Core inflation was reported at 2.8 percent, against an anticipated 2.7 percent. This stronger-than-expected inflation has pushed the US 10-year bond yield to 4.47 percent, thus limiting gains for precious metals globally.
Market analysts indicate that COMEX Gold faces immediate resistance in the $4,780-$4,800 range, while support is identified at $4,670-$4,640. On the MCX, resistance is observed near ₹1,64,000, with sustained movements above this threshold potentially paving the way toward ₹1,65,000-₹1,66,000.
Silver prices also remained stable, with MCX Silver trading above ₹2,95,000 after surpassing key resistance levels, while COMEX Silver held within the $87-$88 range, buoyed by safe-haven demand and concerns about supply.
Published on May 13, 2026.
