Gold and Silver Premiums Surge in India Amid Import Curb Speculations

Gold premiums in India have surged past $100 an ounce, reaching a record high, as traders speculate on potential government import curbs to support the rupee. The spike reflects anticipation of increased import duties, as the Union Budget for 2026/27 looms and trading dynamics shift sharply.

Gold premiums in India have soared to over $100 an ounce for the first time in more than a decade, with silver premiums also hitting record highs. Traders are adjusting prices amid speculations of potential import restrictions aimed at supporting the weakening rupee.

Bullion dealers have started charging a hefty premium of up to $112 per ounce over the official domestic gold prices, which include 6% import and 3% sales taxes. This marks the highest premium since May 2014, a stark contrast from last week's $12 discount. Silver premiums have similarly surged to $8 per ounce, surpassing the previous record set last October. As the world's second-largest consumer of gold and the largest of silver, India's economic positioning is heavily influenced by these commodities.

There is widespread speculation about a potential increase in import duties in the upcoming Union Budget for 2026/27, as Finance Minister Nirmala Sitharaman prepares to present it. The government had reduced import duties on precious metals to address smuggling. However, rising imports in recent months have widened the trade deficit, pressuring the rupee. The demand for gold and silver is largely import-driven, with local prices hitting all-time highs, shifting market dynamics considerably.

(With inputs from agencies.)