look news india
A very shocking and major economic development has emerged from the global commodity market. The prices of gold, which is considered a safe investment internationally, have seen an unexpected and huge decline in the last few months. According to financial data, during Friday’s trading session, the international price of spot gold closed at $ 4,068.71 an ounce. This price has fallen by about 24 percent from its historical high of $ 5,379 per ounce made on January 29, 2026 this year. According to global financial principles, whenever the price of a commodity, metal or asset class sees an improvement or decline of 20 percent or more from its all-time high, then in technical language it is considered to be entering a ‘bear market’ i.e. a severe recession.
However, the impact of this global recession has not been seen in the Indian domestic market in the same proportion as it was seen on the international front. According to the latest report of the country’s leading bullion organization All India Bullion Association, the price of 24 carat gold of 99.9 percent purity was seen stable at Rs 1,46,300 per 10 grams in the wholesale market of the national capital Delhi during Dhanteras and Diwali. If this is compared with the domestic record high of January 29, 2026, when gold had reached an unprecedented high of Rs 1,83,000 per 10 grams, the overall fall in prices in the Indian market has been recorded at only about 20 percent. This simply means that while gold became cheaper by 24 percent all over the world, in India this relief was limited to only 20 percent. In this way, a clear gap of 4 percent has emerged between the two markets, which has forced everyone from common jewelery buyers to commodity experts to think why and how this gap exists in the domestic market.
The most important and primary reason for this 4 percent difference between the global and Indian bullion markets is the policy announcements of the Central Government related to Import Duty. India imports about 85 to 90 percent of its annual domestic demand for gold from abroad. This is why the price of gold sold locally does not depend only on the international spot rate, but customs duty, cess and local taxes play an important role in it. When gold was at its highest peak of Rs 1.83 lakh at the end of January 2026, the total effective import duty applicable on gold import into the country was only 6 percent. Due to that low tax, the direct effect of international prices was visible on domestic retail rates.
But due to skyrocketing gold prices and huge import bill, there was unexpected pressure on India’s trade deficit and foreign exchange reserves. To solve this, the Central Government took a major policy decision on May 13 and directly increased the effective customs duty on gold and silver from 6 percent to 15 percent. This 15 percent tax structure included 10 percent Basic Custom Duty (BCD) and 5 percent Agriculture Infrastructure and Development Cess (AIDC). In this way, a lump sum increase of 9 percent in import duty was directly implemented. The decision was taken just days after Prime Minister Narendra Modi appealed to countrymen to avoid unnecessary purchases of gold for a year to save foreign exchange and control the current account deficit. This 9 percent tax hike by the government absorbed the impact of the recession in gold prices in the international market to a great extent, due to which despite the 24 percent decline globally, the prices in India could not fall at that pace.
The second biggest and decisive factor behind this difference of 4 percent between the international and Indian markets is the exchange rate of the Indian Rupee in the foreign exchange market. Gold’s official trade and spot benchmarks around the world are settled in US dollars (USD). Whenever an importer or bank in India buys gold from abroad, it has to pay international vendors in dollars. Its simple rule is that if the Indian Rupee weakens against the Dollar, then the landing cost (import cost) of gold in India automatically increases despite the price remaining stable or falling in the international market.
If we look at the historical data of the currency market, on January 29, 2026, when gold had made its old records, the Indian Rupee was trading around the level of 92 against the US dollar, which was considered to be the historical low of that period. Demand for the dollar from importers remained strong due to high international crude oil prices and global geopolitical uncertainties. Due to weak rupee, it remained expensive for Indian jewelers to source gold from foreign markets. This currency devaluation gave artificial support to the price of gold in the domestic market. As a result, when the huge recession of 24 percent recorded in dollar terms in the foreign markets was converted into Indian Rupee and reached the domestic bullion counters, its actual impact came down to only 20 percent.
Commodity and bullion market analysts believe that the 9 per cent increase in import duty and the rupee’s exchange rate have prevented the full benefit of the international recession from reaching domestic consumers. Additionally, local demand for physical gold remains extremely strong in retail markets across the country due to the big Dhanteras, Diwali and upcoming wedding seasons in India. Jewelers also traded at a premium locally as jewelery makers maintained stocks despite higher import duties to meet festive season demand.
Market experts say the fall from high of Rs 1,83,000 to Rs 1,46,300 per 10 grams is definitely a relief sign for Indian retail buyers and long-term investors. Given the bearish trend internationally and the important technical support of $ 4,000 an ounce, gold prices may see limited fluctuations in the coming weeks. If global trading conditions improve in the future and the government reviews import duties, only then will the Indian market see full sync with international rates; Otherwise this price difference between Indian and foreign markets will persist due to this dual effect of tax and currency.