Taxation changes, customs duty hikes, and global tensions are set to impact bullion prices in the latter half of 2026, with expectations of volatility and potential consolidation following recent corrections. The All India Gem & Jewellery Domestic Council (GJC) report highlighted subdued jewellery demand, although sales could see a boost during the festive season, especially in lightweight categories. Uncertainty surrounds reforms to the Gold Monetisation Scheme and possible tax adjustments, while geopolitical risks remain a significant factor that could spur safe-haven demand.
The report emphasized that the initial six months of the year witnessed record highs in bullion prices, succeeded by corrections that reshaped consumer sentiment and industry perspectives. Gold prices reached a peak of Rs 1,70,480 per 10 grams in January 2026 before dropping to around Rs 1,42,800 per 10 grams by late June. Similarly, silver prices surged to over Rs 4,02,490 per kilogram in January but then decreased to approximately Rs 2,25,940 per kilogram by late June. These fluctuations led investors towards safe-haven purchases, while jewellery demand weakened due to affordability concerns.
The GJC noted a shift towards lightweight jewellery designs among consumers, reflecting both budget constraints and evolving fashion preferences. The council highlighted that a rise in customs duty announced in May 2026 elevated domestic prices, impacting retail demand negatively. Challenges related to GST burdens and compliance persisted, urging for streamlining measures. Advocating for reforms in the Gold Monetisation Scheme to unlock idle household gold’s value, reduce import reliance, and fortify domestic supply chains, the council stressed the need for industry enhancements.
Chairman of GJC, Rajesh Rokde, anticipates robust support for jewellery demand in the upcoming festive season and the peak wedding period in the latter part of the year, particularly in lightweight segments. Despite market volatility, driven by profit-taking, a stronger US dollar index, and expectations of sustained high global interest rates, cultural factors and India’s enduring affinity for gold are expected to maintain market resilience. Rokde highlighted that retail prices have remained high post-corrections, with market adjustments underway following extraordinary highs and evolving global sentiments amid reduced safe-haven demand post-geopolitical tensions.
