Duty Hike Triggers Sharp Fall In Gold Demand, Old Jewellery Sales Surge: IBJA

A steep hike in gold import duty, coupled with falling prices, has made Indian buyers wary, according to Surendra Mehta, secretary of the India Bullion Jewellers Association (IBJA). Demand for the metal has fallen by over 70% as a result.

On 13 May 2026, the government raised customs duty on gold from 6% to 15%, coming just two days after Prime Minister Narendra Modi asked citizens to defer gold purchases for a year. Mehta pointed out that demand has stayed subdued ever since that appeal.

Households Turn Sellers

Faced with weak demand and falling prices, a growing number of households are choosing to sell off their old gold rather than invest in new jewellery. IBJA estimates the volume of old gold sold between April and June 2026 at close to 50 tonnes, a jump of more than 50% over the same period last year.

Falling prices have also pushed more people towards taking gold loans instead of selling outright, as many expect prices to fall further still. That said, gold remains significantly costlier than the ₹95,600 level seen a year earlier.

Tracking The Price Correction

Gold had touched a peak of over ₹1,80,000 ($5,600) per 10 grams on 29 January 2026. It has since corrected by close to 30%, dropping to around ₹1,40,000 ($3,960) as of 30 June 2026.

Mehta described current market sentiment as weak, with both retail consumers and investors offloading gold in the open market on fears that prices could fall further.

Fourth Consecutive Monthly Decline

Data from the Augmont Bullion report, dated 30 June, shows gold falling below the $4,000 mark for the first time in nearly eight months, putting it on track for a fourth straight month of losses. Escalating tensions in the Middle East and expectations of further US rate hikes have driven the slide.

Per the report, gold has lost over 12% of its value this month alone, and nearly 15% over the quarter, its worst quarterly performance since 2013.

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What Comes Next For Gold

The report warned that having broken below the key $4,000 support level, gold could head towards $3,600 (₹1,30,000) if the trend holds. That said, with the metal now in oversold territory, a bounce-back towards $4,100 (₹1,45,000) or even $4,165 (₹1,47,000) cannot be ruled out.