Business
oi-Madhuri Adnal
Gold prices in Bangalore today, May 15, witnessed a sharp decline across 24K, 22K and 18K categories, with silver prices also falling significantly amid pressure from weak global bullion markets and fresh government measures aimed at curbing precious metal imports. The latest correction comes as rising tensions in the Middle East continue to impact commodity markets and India’s foreign exchange reserves.
On May 15th in Bangalore, gold prices declined sharply, with 24K at ₹16,009/gram and silver at ₹290/gram, amidst global bullion pressures and Indian government measures including a 100 kg import cap under the Advance Authorisation scheme, aimed at reducing pressure on foreign exchange reserves.
Today’s gold prices in Bengaluru stand at ₹16,009 per gram for 24 carat gold, down ₹224 from the previous session. Meanwhile, 22K gold prices have slipped by ₹205 to ₹14,675 per gram, while 18K gold is now retailing at ₹12,007 per gram after falling ₹168.
Gold prices for larger quantities have also recorded a noticeable drop. The rate for 10 grams of 24K gold in Bengaluru is currently ₹1,60,090 compared to ₹1,62,330 yesterday. Similarly, 10 grams of 22K gold now costs ₹1,46,750, while 18K gold is priced at ₹1,20,070 for the same quantity.
Silver prices in Bengaluru have also declined alongside gold prices. Silver is currently trading at ₹290 per gram and ₹2,90,000 per kilogram, reflecting a fall of ₹10 per gram and ₹10,000 per kilogram from Thursday’s rates.
The fall in gold prices and silver prices comes as bullion futures traded sharply lower on the Multi Commodity Exchange (MCX) during early trade on Friday. At around 9:03 am, the MCX gold June futures contract had dropped 0.82% or ₹1,320 to ₹1,60,133 per 10 grams. MCX silver July futures also declined by 3.28% or ₹9,551 to ₹2,81,551 per kilogram.
Globally too, gold prices remained under pressure after stronger-than-expected US inflation data fuelled expectations that interest rates could remain elevated for a longer period. Higher interest rates typically reduce investor appetite for non-yielding assets such as gold and silver. International gold prices reportedly traded nearly 0.8% lower and have fallen around 2% over the last week.
Domestic policy changes have also weighed on gold prices in India. The Centre has intensified efforts to reduce gold imports amid concerns over mounting pressure on the country’s foreign exchange reserves during the ongoing Middle East conflict.
Following a major import duty hike earlier this week, the government has now imposed a 100 kg cap on gold imports under the Advance Authorisation scheme, which allows jewellery exporters to import raw materials without duty. Earlier this week, import duty on gold, silver and platinum was increased from 6% to 15%, a move expected to impact bullion prices and jewellery demand in the coming months.
Prime Minister Narendra Modi had also appealed to citizens to postpone non-essential gold purchases in order to help conserve foreign exchange reserves amid the evolving geopolitical situation.
Shrey Madaan, Indian Policy Associate at the Consumer Choice Center, said,”Using steep import duties to manage currency pressure may appear effective in the short term, but history shows such measures often push demand into informal channels instead of reducing it.”
Industry representatives have already raised concerns that higher import taxes could encourage smuggling and contribute to the growth of a parallel economy. India remains one of the world’s largest gold consumers, with domestic demand heavily dependent on imports.
CCC notes that higher duties are likely to increase jewelry prices, widen the gap between legal and illicit markets, and place additional pressure on genuine businesses operating within the formal economy.
“Market distortions rarely eliminate demand; they usually redirect it,” Madaan added. “When legal imports become more expensive, informal trade becomes more attractive, undermining transparency and hurting formal businesses.”
Despite the latest decline in gold prices, jewellers in Bengaluru say demand remains relatively stable ahead of the upcoming festive and wedding season. However, market experts believe gold prices and silver prices could remain volatile in the near term due to geopolitical tensions, currency fluctuations and uncertainty in global commodity markets.
