Gold prices in India have witnessed intense fluctuations over the past one-and-a-half months due to multiple factors, including the Iran-US war.
Prices have come under pressure amid rising crude oil prices, a strengthening US dollar against the domestic currency, and higher-yielding US Treasury bonds weighing on the safe-haven metal.
Gold, which was hovering at around $4,500 per ounce back in April, is currently trading at around $3,992 per ounce internationally. Gold prices usually decline in India during peak summer days, mainly because the Indian marriage market picks up around the end of August every year.
Besides the demand factor, Prime Minister Narendra Modi's appeal has also weighed on the gold and silver market.
In an announcement, he said, "I urge every citizen of the country to avoid purchasing gold for one year to help the Indian economy stabilise and maintain its forex reserves for critical imports like oil and gas."
Two days after the announcement, the Centre hiked the import duty on gold and silver from 6 per cent to 15 per cent to discourage gold buying. Since then prices have fluctuated from topping $4,700 in April to $3,990 per ounce in the international market. Gold is not just an investment metal for Indians; it is connected to sentiments.
People buy precious metals to safeguard their investments and diversify their portfolio while making it a cash asset that can be used during emergency situations.
Experts believe that prices are going to stabilise in the coming months after the US-Iran war subsides, which would boost crude oil supply and reduce demand for oil and gas.
Investors are currently focused on energy and defence stocks after both countries resumed hostilities earlier last week.
According to US-based institutes analysing the pattern and trend in the bullion prices, including Morgan Stanley, gold prices in India are expected to remain strong at $5,500 to $6,000 per ounce in 2026 despite immediate and short-term corrections.
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