Editor’s Note
This article reports a sharp drop in domestic gold prices on Budget Day, driven by profit-taking and a stronger US dollar. The figures cited are based on preliminary market data.
On the day of the Union Budget 2026, a significant decline was recorded in gold prices in the Indian bullion market. Gold has fallen from its record high of ₹1,80,779 to around ₹1,60,730 per 10 grams, marking a decrease of approximately ₹31,704. Analysts have attributed this to profit booking and the strengthening of the US dollar.
Just before the start of the budget session, a sharp decline of ₹14,000 in a single day was recorded in Delhi’s bullion market on Friday. According to Goodreturns data, the price of 24-carat gold now appears to be stabilizing around ₹1,60,730. This is also due to a 34% decline. According to analysts, market uncertainty on budget day and expectations of a potential cut in import duties have made buyers and traders cautious.
According to analysts at HDFC Securities, the main reason for this sharp decline in gold prices is profit booking by institutional investors. When prices were at their peak, large investors began selling their holdings, which increased supply in the market and put pressure on prices. Additionally, the strengthening of the US dollar internationally has also dimmed gold’s shine. Experts at InCred Money believe that potential leadership changes at the US Federal Reserve and discussions about Donald Trump nominating Kevin Warsh have pushed the dollar index higher, which has had a direct impact on the commodity market.
The bullion and jewelry industry has high expectations from Budget 2026. The current import duty on gold is 6%, and there is a strong possibility it will be reduced to 3% or 4%. If the government announces a cut in import duty, gold prices in the domestic market could fall further. Additionally, there is also talk in the market that the government may introduce new rules regarding the disclosure of gold in income tax returns (ITR). According to research analyst Gaurav Garg, this drop in prices could lead to an increase in demand during the upcoming wedding season, as consumers in the Indian market are highly sensitive to prices.
Uniformity is being observed in gold prices across major metropolitan cities in the country, although minor differences remain due to local taxes. In Delhi, the price of 24-carat gold is ₹1,60,730 per 10 grams, while 22-carat gold was recorded at ₹1,47,350. In Mumbai and Kolkata, 24-carat gold is trading at ₹1,60,580. Prices in Chennai are slightly higher at ₹1,62,550. Prices in cities like Lucknow, Kanpur, and Jaipur are also similar to Delhi. Analysts say further fluctuations in these prices are possible after the final budget proposals.
According to market experts, this correction in gold prices was technically necessary as the market was in an overbought condition, and the strengthening dollar and changes in global geopolitical situations have forced investors to look at alternatives other than gold as a safe investment. Domestically, the budget announcements and the government’s stance on import duties will determine the direction of gold for the next few months.