Budget 2025 Expectations: Key Changes That May Drive Sentiments In 24K, 22K, 18K Gold Prices In India Ahead

Gold prices in India surged ahead of Donald Trump's inauguration day on Monday, January 20th. His second swearing-in ceremony as US President. So far in January month, gold prices have witnessed bullish trend with 24K and 22K prices of yellow metal rising as much as 4.20%. Apart from Donald Trump's policies and reforms that is expected to make a significant shift in market globally, it will be the upcoming Union Budget 2025 announcement by Finance Minister Nirmala Sitharaman that would also play a key role in influencing sentiment in gold prices in India. Majority of experts are hoping for measures in import duty on precious metals like gold.

One of the major reasons why gold prices surged in 2024 was the customs duty cut in July 2024 when PM Modi-led government trimmed custom duty on gold and silver bars by a massive 60% to 6% from the earlier 15% in the Budget FY25 announcement. Additionally, customs duty on gold and silver gore has been cut by 62.7% to 5.35% from earlier 14.35%.

In 2024 alone, gold rose by 25% and broke at least 40 new record highs. Total gold demand surpassed $100 billion for the first time in Q3, driven by its role as a hedge against rising geopolitical tensions, currency debasement, and market volatility.

The start of January has been positive as well. The highest price that gold touched in India was on January 20th at Rs 81,230 per 10 grams in 24K and Rs 74,500 per 10 grams in 22K. Gold prices were merely at Rs 78,000 and Rs 71,500 per 10 grams in 24K and 22K in the start of January. So far, the prices have risen by at least 4.2%, compared to decline of 1% in December 2024.

On January 20th, the day of inauguration of Donald Trump, 24K gold price rose by Rs 1,200 per 100 grams to Rs 8,12,300 and up by Rs 120 to Rs 81,230 per 10 grams. The price of 22K of 100 grams surged by Rs 1,500 to Rs 7,45,000 in 100 grams and up by Rs 150 to Rs 74,500 per 10 grams. In 18K, gold price zoomed even higher by Rs 1,700 per 100 grams to Rs 6,10,000 and up by Rs 170 in 10 grams to Rs 61,000.

Meanwhile, international gold price traded above $2,799 an ounce, as investors geared up for President-elect Donald Trump's inauguration later today. His proposed trade tariffs are expected to fuel inflation and potentially trigger trade wars, which could boost gold's appeal as a hedge against inflation, as per Trading Economics.

Also, MCX gold prices held onto Rs 79,000 per 10 grams and traded at a cautious tone.

On the latest performance, Rahul Kalantri, VP of Commodities, Mehta Equities said, gold and silver prices showed very high price volatility and showed profit-taking from higher levels as tensions in the Middle East eased and upbeat U.S. housing data, reducing safe-haven demand. Gold inventories at COMEX-approved warehouses have increased by one-third in the last six weeks as market participants sought supplies to hedge against the risk of import duties from Trump.

However, Kalantri added, uncertainty in the global financial markets ahead of U.S. President Donald Trump's inaugural speech and an increase in the U.S. jobless claims supported gold and silver prices. Gold has support at $2678-2660 while resistance at $2710-2727. Silver has support at $30.00-29.80 while resistance is at $30.42-30.59. In INR gold has support at Rs 78,820-78,580, while resistance at Rs 79,220-79,450. Silver has support at Rs 90,800-90,270 while resistance at Rs 93,650-94,280."

What To Expect In Budget 2025 For Gold Market?

MP Ahammed, Chairman, of Malabar Group said, the demand for jewellery has strengthened after the gold import duty cut in the Union Budget 2024. Therefore, in the first full budget of NDA 3.0, the jewellery industry expects policy continuity to boost consumer demand for jewellery, thus generating more employment and playing a pivotal role in economic growth. To boost demand for precious jewellery, the budget needs to propose tax relief measures to boost disposable income and consumption. Some strategic measures to control inflation impact on consumption are also welcome.

In addition, Ahammed added that the budget needs to propose measures to make the gold monetisation scheme more attractive to the people. This way, more idle household gold will be mobilised, resulting in reduced gold import bill and decreased current account deficit. The government may propose measures to revise the existing gold monetisation scheme to facilitate participation of recognized and reputed retail jewellers. The budget should also announce measures to curb unaccounted business in the retail jewellery sector.

"The budget should also continue with the capital expenditure on infrastructure development so that the organised jewellery retail segment can further enhance its market penetration and discover new demand centres," Ahammed added.

Further, Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) said, "Bullion Industry has a lot of expectations from this budget, as always. Since this industry is regulated by SEBI, RBI, DGFT, Ministry of Finance, Ministry of Commerce, etc, market players want a single regulator in this market. Moreover, bullion refiners have been working on a paper-thin margin of 0.65% for the last few years, this margin should be increased by decreasing the import duty on dore imports."

Kothari said, "The bullion market also wants to stop import duty benefits from LDC and FTA and a special benefit of 0.5% for importing gold through IIBX. Other expectations are the establishment of GST-bonded warehouses, permitting EMI on jewellery purchases, and allowing lending and borrowing through commodity exchanges."