If you checked gold prices today and did a double-take, you're not alone. Gold and silver prices in India surged sharply on Wednesday, May 13, 2026, recording one of the biggest single-day rallies in recent months after the government raised the import duty on gold and silver to 15% from 6%. The jolt was swift, brutal, and deeply consequential — for buyers, investors, jewellers, and the broader economy alike.
Here's a complete breakdown of what happened, why it happened, and what it means for you.
The Numbers: How Far Did Gold Jump?
The scale of today's price movement is staggering. 24 Karat gold rose by ₹1,391 per gram to ₹16,789, while 22 Karat gold surged by ₹1,275 to ₹15,390 per gram on May 13.
To put that in perspective for larger purchases: over just three trading sessions, from May 11 to May 13, the price of 24K gold skyrocketed by ₹1,55,400 per 100 grams, underscoring the intensity of the ongoing rally.
Silver wasn't spared either. Silver prices surged close to ₹2,90,100 per kilogram in the domestic bullion market — a steep climb that mirrored the panic in the gold market.
The Trigger: A Dramatic Import Duty Hike
The root cause of today's price explosion is a single government policy decision. The Centre has raised the import duty on gold and silver to 15% from the earlier 6%.
The structure of the new duty is: a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC), taking the effective import tax to 15%.
This is a dramatic reversal of a policy from just two years ago. In 2024, duty was sharply reduced to 6% to support the jewellery sector and reduce illegal imports. Now, in 2026, the government has once again increased the duty back to 15%.
The market's reaction was near-instant. Soon after the announcement, gold prices jumped nearly 6%, and gold ETFs also started trading higher as markets reacted to the sharp duty hike.
Why Did the Government Do This?
This isn't just about gold. It's about rupees, dollars, and India's precarious macroeconomic position.
This move is much more than just the price of gold going up overnight. The duty hike is part of a larger economic strategy as India grapples with rising crude oil prices, a weakening rupee, pressure on forex reserves, and tensions in West Asia.
India imports most of the gold it consumes because domestic production is very limited. So whenever Indians buy gold jewellery, coins, bullion, or even digital gold, India usually needs to import that gold from abroad using US dollars — creating pressure on the economy.
The scale of India's gold import addiction is staggering. India alone spent close to $72 billion on gold imports in FY26, one of the biggest import bills ever on the precious metal in the country.
The decision comes amid concerns over rising gold imports, pressure on foreign exchange reserves, and weakness in the rupee. In other words, the government is using duty as a blunt instrument to cool down dollar outflows.
Interestingly, this also follows a direct appeal from the country's top leader. This has been the government's swift response to a call by PM Narendra Modi last week to limit gold imports and spending on the precious metal for a year if possible.
Who Gets Hurt? The Ripple Effect
🛒 Buyers & Wedding Shoppers
The most immediate pain falls on everyday consumers. The effect is felt across the entire gold ecosystem — from jewellery buyers to investors, bullion traders and the wedding market. If you were planning a purchase for an upcoming wedding or festival, your budget just got significantly tighter.
📉 Jewellery Stocks Take a Beating
The stock market wasted no time pricing in the damage. Kalyan Jewellery shares fell 5.8% intraday on the National Stock Exchange, while Senco Gold stock dropped 3.4%. Shares of Sky Gold and Diamond, P N Gadgil, and Thangamayil Jewellery fell in the range of 3.6% to 4.5%. Shares of Titan Company, meanwhile, slipped 1.5%.
🏪 Jewellers Face Demand Slowdown
The underlying demand situation was already fragile. India's gold jewellery consumption slumped by 19% year-on-year to 66.1 tonnes in Q1CY26, data by the World Gold Council shows. Higher prices are likely to deepen that slump.
Analysts said the duty hike could squeeze volumes for jewellers as consumers may postpone purchases due to elevated prices.
⚠️ The Grey Market Warning
There's a darker concern lurking beneath the policy move. While the government aims to curb imports, the industry warns that grey marketers may benefit. When the price gap between official and unofficial channels widens sharply, smuggling and black-market trade historically pick up.
Is This a Good Time to Buy Gold?
That depends on your perspective. For long-term investors, gold remains one of the most reliable stores of value — particularly in a world of geopolitical uncertainty and currency volatility. But for those looking to buy jewellery or make a near-term purchase, analysts advise caution.
"The current measures taken by the government will weigh on physical gold buying in the short-to-medium, affecting the margins and revenue of jewellery players," said Krnthi Bathini, equity strategist at WealthMills Securities. Investors should wait for another 10% correction in jewellery stocks before taking any investment decision.
Today's surge in gold prices is not a random market blip. It is the direct, near-instantaneous result of a sweeping government policy decision designed to protect India's foreign exchange reserves in the face of a perfect storm — high crude oil prices, a weakening rupee, geopolitical uncertainty in West Asia, and a ballooning trade deficit. The sharp import duty hike from 6% to 15% has fundamentally repriced gold in the domestic market overnight.
For India's millions of gold lovers, this is a moment to pause, recalibrate, and watch closely. The government has made its message clear: now is not the time to buy gold. Whether the markets — and Indian households — listen, is another story entirely.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Please consult a certified financial advisor before making investment decisions.