Gold & Silver Rates In Focus Due To Budget 2026: Will FM Sitharaman Cut Customs Duty On February 1?

Gold rates and silver rates in India will be in focus on Budget 2026, as industry experts seek measures that could reduce costs and simplify trade procedures from Finance Minister Nirmala Sitharaman. The FM is going to present Union Budget 2026 on February 1, which falls on a Sunday. Gold and silver prices which have recorded breathtaking rallies in January, will react to the Budget next week from Monday.

Gold Rates In India:

At the time of writing, 10 grams gold price crashed steeply by Rs 9,650 to Rs 1,69,200 in 24 carat, while 100 grams gold nosedived by Rs 96,500 to Rs 16,92,000 in the same carat. Also, 22 carat and 18 carat gold prices plunged by Rs 8,850 and Rs 7,240 in 10 grams each to Rs 1,55,100 and Rs 1,26,900 respectively on January 30, 2026.

Despite the sharp decline, gold rates in India are on path to end January with more than 25% gains across carats.

Silver Rates In India:

Silver rates in India fell as sharply as Rs 50,000 in 1Kg. Currently, 1Kg silver price is down by Rs 15,000 to Rs 3,95,000. Notably, in cities like Chennai, Hyderabad and Kerala, 1Kg silver is still above Rs 4 lakh mark to Rs 4,05,000.

Nonetheless, silver has given nearly 66% returns despite the latest downfall.

The reason behind the severe correction in precious metals is because both gold and silver were overbought and that led to profit-booking. Further, a strong rebound in dollar added to woes. But the outlook for gold and silver going ahead is still bullish due to geopolitical and trade uncertainties which has raised concerns on the growth prospects of global economic conditions for FY27.

Budget day will be another key factor that would drive sentiments in gold and silver next month.

"Gold witnessed sharp selling pressure after margin hikes triggered aggressive profit booking in CME, where prices corrected from the recent peak of $5,500 to near $5,000. The impact was even more pronounced in MCX, as gold slipped from record highs above ₹1,80,000 to intraday lows near ₹1,55,000. Such elevated volatility is expected to persist for a few more sessions until positions normalize and buyer-seller equilibrium returns," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

He added that technically, CME gold is likely to remain volatile in the $4,800-$5,200 range; a sustained break below $4,800 could open downside towards $4,500. In MCX, gold is expected to oscillate between Rs 1,58,000 and Rs 1,70,000, with stability returning only once price action consolidates within this broader band."

Gold & Silver Budget 2026 Expectations:

As India finalises Budget 2026-27, Mangesh Chauhan, Managing Director of Sky Gold told GoodReturns that the gems and jewellery sector seeks measures that reduce costs, simplify trade procedures, boost domestic demand, and enhance global competitiveness. In a challenging global trade environment, marked by tariff pressures and shifting supply chains. Pragmatic and growth-oriented reforms can have an outsized impact on industry sustainability and employment.

Chauhan explained that a key priority is rationalising import duties on gold, silver, platinum, coloured gemstones and other essential inputs. Lower duties will ease manufacturing costs, improve pricing for exporters, and help Indian producers compete more effectively in global markets. Simplification of customs procedures through faster clearances, risk-based checks, and digital documentation would reduce delays and lower logistics costs for exporters.

During Budget FY25, after the saffron party won the general election, Finance Minister Nirmala Sitharaman announced the full-fledged Budget, where she reduced the total customs duty on the import of gold to 6% from 15%. Also, the duty on gold ore imports was brought down to 5.35% from 14.35%. Meanwhile, platinum and silver bars also recorded a sharp decline in their duty to 6.4% and 6%, respectively.

That time, import duty cut spurred demand in gems and jewellery, while gold and silver prices took a temporary setback.

Furthermore, on the domestic front, he further said, "streamlining GST on jewellery, including a reduction from the current 3 per cent to around 1-1.25 per cent, will lower the cost to consumers, encourage formal sales, and broaden the tax base. There is also a clear industry call for the early rollout of the Tourist GST Refund scheme at major airports, which will help retain luxury retail spending within India. Additional support for skills development, infrastructure in export clusters, and industry formalisation will further strengthen India's position in global markets. In aggregate, these measures can stimulate domestic demand, safeguard jobs, and sustain export growth amid external uncertainties."

Accordingly, it will be keenly watched if FM announces yet another sharp reduction in customs duty on precious metals.

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