Gold Rate In India In Bumper Rally: No GST Rate Cut For Gems & Jewellery; What Does It Mean For Gold Prices?

Gold rates in India have continued their bumper rally in the first week of September 2025, rising by nearly 2%. At present, 10 grams of 24 carat has touched a new all-time high of Rs 107,630. The case was similar for other carats. One of the biggest events of this week was the GST rationalization. However, unlike other consumption products, there were no cut GST rates for gems and jewelry. What does this mean for gold prices in India? Let's check its short-term outlook.

GST Rate On Gold Purchase In India:

The current GST rate on the value of gold is 3%, which is a combination of 1.5% CGST and 1.5% SGST. This is applicable to all types of gold, such as jewellery, coins, and bars.

There is an even higher GST rate on gold jewellery making charges to the tune of 5%. Additionally, there is a separate 3% GST rate imposed on custom-made jewelleries.

Impact Of No GST Cut On Gems & Jewellery?

According to Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Ltd. (RSBL), the GST Council's announcement on maintaining 3 percent GST on gold and silver and 5 percent on jewellery-making charges has brought stability but comes with mixed results. For jewellers, it doesn't change how they do business as there is no relief on margins, despite their hopes of getting a rate cut, in order to stimulate demand, to the end-consumer.

He added, "Higher costs may still have a detrimental impact on affordability, particularly during the festive season."

For investors, Kothari said, "unchanged GST provides clarity to the buyer, and also does not create havoc in the market, however, entry costs remain slightly high compared to global benchmarks. On the one hand, the decision should defend the government's revenue stream, but both jewellers and buyers may feel that their growth opportunities remain hindered."

Gold Prices Outlook For Short Term:

"Gold prices remain near record highs, supported by persistent weakness in the U.S. labour market, which has strengthened expectations of a Federal Reserve rate cut on September 17, a move that would favour the precious metal. While technical indicators suggest gold may be entering overbought territory after its recent rally, prices are still finding strong support at lower levels," said Darshan Desai, CEO - Aspect Bullion & Refinery.

"This resilience is driven by concerns over the Fed's independence, a weakening U.S. dollar, and uncertainty surrounding Donald Trump's tariff policies. All eyes are now on today's non-farm payrolls data, which is expected to play a crucial role in shaping gold's short-term direction," the expert added.

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