Buying gold and silver could become cheaper after the Union Budget on February 1, 2026. The government is considering a reduction in customs duty from 6% to 4% on precious metals. If announced, gold prices could fall by nearly ₹3,000 per 10 grams, while silver may become cheaper by around ₹6,000 per kilogram.
Current Gold and Silver Prices
After a sharp rally over the past year, precious metal prices are at record highs. In 2025, gold surged 75%, while silver jumped an astonishing 167%.
As of January 2026, 24-carat gold is trading at around ₹1.50 lakh per 10 grams, and silver is priced close to ₹3.50 lakh per kilogram.
5 Reasons Behind the Surge in Gold and Silver Prices
1. Global War and Uncertainty
Rising geopolitical tensions, trade wars, and global instability pushed investors towards gold as a safe-haven asset. According to JP Morgan, uncertainty has been the biggest driver of the rally.
2. Weak US Dollar
Interest rate cuts by the US Federal Reserve weakened the dollar. Since gold and silver are traded in dollars, a falling greenback made these metals more attractive, pushing prices higher.
3. Massive Central Bank Buying
By December 2025, central banks held a total of 32,140 tonnes of gold. According to the World Gold Council, central banks purchased:
- 1,082 tonnes in 2022
- 1,037 tonnes in 2023
- A record 1,180 tonnes in 2024
Purchases are expected to cross 1,000 tonnes again in 2025, providing strong support to prices.
4. Rising Industrial Demand for Silver
More than 50% of silver demand comes from industrial uses such as solar panels, electric vehicle batteries, and semiconductor chips. Strong industrial growth has helped silver outperform gold.
5. Supply Constraints
Mining output of gold and silver has remained limited, while demand continues to rise. This supply-demand mismatch has significantly contributed to the price surge.
Should You Invest Before or After the Budget?
Market experts advise avoiding large lump-sum investments ahead of the February 1 Budget due to potential volatility.
Naveen Mathur, Director–Commodities at Anand Rathi Shares & Stock Brokers, recommends a “buy-on-dips” strategy, saying investors should avoid chasing the rally and instead accumulate gradually in small installments before and after the Budget.
Similarly, Navneet Damani, Head of Research (Commodities) at Motilal Oswal Financial Services, believes volatility may remain high in the first quarter of 2026, but the long-term outlook remains positive. He advises using “decent dips” in prices to increase exposure rather than investing all at once.
Two Ways to Invest in Gold and Silver
1. Physical Gold and Silver
Investors can buy coins or bars from trusted jewelers or banks. 24-carat gold is considered ideal for investment. However, physical storage involves risks such as theft, and bank lockers come with additional costs.
2. Gold and Silver ETFs
Gold and Silver ETFs can be bought through a demat account, just like shares. These offer assured purity, eliminate storage risks, and provide better liquidity, making them a popular choice among modern investors.