Gold and silver prices in India eased on Saturday, May 16, reflecting international market trends influenced by rising US inflation concerns and a stronger dollar.
The drop comes as elevated oil prices have heightened inflation fears in the United States, pushing expectations for higher interest rates and driving benchmark 10-year US Treasury yields close to one-year highs. In the domestic market, both metals saw modest declines, partly due to a weaker rupee against the US dollar.
In Mumbai, 24-carat gold was priced at Rs 1,57,900 per 10 grams, while 22-carat gold stood at Rs 1,44,740 per 10 grams. These figures exclude GST and making charges. Similar rates were observed in several other major cities.
City-wise Gold Rates on May 16 (per 10 grams):
Delhi: 22K – Rs 1,44,890; 24K – Rs 1,58,050
Jaipur: 22K – Rs 1,44,890; 24K – Rs 1,58,050
Ahmedabad: 22K – Rs 1,44,790; 24K – Rs 1,57,950
Pune, Mumbai, Hyderabad, Chennai, Bengaluru, Kolkata: 22K – Rs 1,44,740; 24K – Rs 1,57,900
Globally, the dollar strengthened by more than 1% this week, making bullion more expensive for buyers using other currencies. Brent crude oil prices climbed 6.2% for the week, trading above $106 per barrel, amid ongoing tensions from the Iran conflict that have kept the Strait of Hormuz largely closed.
Gold prices have fallen over 13% since the US-Iran conflict began on February 28. Recent inflation data has raised concerns that surging energy costs could spread to broader goods and services, reducing hopes for imminent US rate cuts. Market participants have largely ruled out rate reductions this year, with CME Group’s FedWatch tool indicating a 39% probability of a rate hike by December.
On the trade front, India’s gold imports jumped 81.69% year-on-year to $5.62 billion in April, even as higher prices and policy measures may weigh on future volumes. Silver imports surged 157.16% to $411 million during the same period, per commerce ministry data.
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In response to pressures on foreign exchange reserves amid the West Asia situation, the government raised import duties on gold and silver to 15% from 6%, effective May 13. Duties on platinum were also increased. Earlier, Prime Minister Narendra Modi had urged citizens to refrain from gold purchases for a year to help conserve forex reserves.
Gold prices in India are primarily shaped by international rates, import duties, taxes, and rupee-dollar movements. The yellow metal holds significant cultural and financial importance in the country, serving as both an investment and a staple for weddings and festivals. Investors continue to track these shifts closely in the current volatile environment.