Union Budget 2026: Will Gold and Silver Get a Customs Duty Cut on February 1?
Gold and silver rates in India are set to remain in sharp focus as Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026 on February 1. Market participants and industry leaders are closely watching for policy measures that could lower costs and simplify trade procedures for the gems and jewellery sector.
After witnessing a stunning rally through most of January, gold and silver prices have seen a steep correction in recent sessions. The bullion market is expected to react to Budget-related announcements when trading resumes on Monday.
Gold Prices in India
As of January 30, 2026, gold prices recorded a sharp decline across carats. The price of 24-carat gold plunged by ₹9,650 to ₹1,69,200 per 10 grams, while 100 grams slipped by ₹96,500 to ₹16,92,000. Meanwhile, 22-carat gold fell by ₹8,850 to ₹1,55,100 per 10 grams, and 18-carat gold dropped by ₹7,240 to ₹1,26,900 per 10 grams.
Despite this sharp fall, gold prices remain on track to end January with gains of over 25 percent, supported by strong investor demand and global uncertainties.
Silver Prices in India
Silver prices also witnessed heavy selling pressure. The price of 1 kg silver fell by as much as ₹50,000 during the correction, and is currently down by ₹15,000 at ₹3,95,000 per kg. However, silver continues to trade above the ₹4 lakh mark in key southern markets such as Chennai, Hyderabad, and Kerala. Even after the decline, silver has delivered nearly 66 percent returns so far.
What Triggered the Fall?
Analysts attribute the correction to profit booking after gold and silver entered overbought zones. A rebound in the US dollar further weighed on prices. However, the broader outlook remains bullish due to geopolitical tensions, trade uncertainties, and concerns over global economic growth in FY27.
Commenting on the volatility, Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said that margin hikes in global markets triggered aggressive selling. He expects gold to remain volatile in the near term, with MCX gold likely to trade between ₹1,58,000 and ₹1,70,000.
Budget 2026 Expectations
Industry leaders are hopeful that Budget 2026 will bring further relief for the sector. Mangesh Chauhan, Managing Director of Sky Gold, said the industry is seeking rationalisation of import duties on precious metals and simplification of customs procedures to reduce costs and boost exports.
He also called for streamlining GST on jewellery and the early rollout of the Tourist GST Refund scheme, which could help strengthen domestic demand and improve India’s competitiveness in global markets.
All eyes are now on whether the Finance Minister will announce another round of duty cuts on gold and silver in the upcoming Budget.
