Abstract：Indian investors faced relatively smaller losses than their other global counterparts since the price correction from a record high in January 2026. Factors that helped support domestic gold prices include a weaker rupee and higher import duties. This led to a smaller dip in rupee-denominated returns compared with the decline in dollar terms, according to the new Axis Mutual Fund report. Global gold prices denominated in USD fell 21.4% from the January 30, 2026 peak to October 30, 2026. Notably, the decline in India's gold prices was 14.9% in rupee terms over the corresponding period. The report attributed two factors that supported India's gold prices in 2026. These were rupee's depreciation, which was from around INR 89 to INR 96 against the USD, and the increase in gold import duty from 6% to 15% in March 2026.
Indian investors faced relatively smaller losses than their other global counterparts since the price correction from a record high in January 2026. Factors that helped support domestic gold prices include a weaker rupee and higher import duties. This led to a smaller dip in rupee-denominated returns compared with the decline in dollar terms, according to the new Axis Mutual Fund report.
Global gold prices denominated in USD fell 21.4% from the January 30, 2026 peak to October 30, 2026. Notably, the decline in India's gold prices was 14.9% in rupee terms over the corresponding period.
The report attributed two factors that supported India's gold prices in 2026. These were rupee's depreciation, which was from around INR 89 to INR 96 against the USD, and the increase in gold import duty from 6% to 15% in March 2026.
Contents| Asset | CY 2025 Return (December 31, 2024-December 31, 2025) | Decline from January 30, 2026 Peak (Jan 30-October 30, 2026) |
| Gold ($) | 0.67% | -21.40% |
| Gold (INR) | 0.75% | -14.90% |
The rupee depreciation led to a rise in the rupee cost of imported gold, cushioning the fall in prices worldwide. On the other hand, the import duty hike from 6% to 15% increased the landed cost of imported gold, offering support to domestic prices.
The sharp correction in gold to profit-booking and the unwinding of leveraged positions led to stop-losses and margin calls, while intensifying selling pressure as prices retreated from the highs in January 2026. For Indian investors, the development meant the correction from the decline in local gold prices was less severe than the fall in dollar-denominated gold prices.
The US-Iran conflict also played a part in gold prices. Oil flow disruptions, along with rising financial pressures across the Gulf decreased the availability of surplus funds for investments in the yellow metal. This raised concerns about potential liquidation of existing holdings. Moreover, increasing inflation owing to higher oil prices raised hopes of elevated interest rates for a long time, increasing US Treasury yields and the dollar and pressuring gold.
Gold's correction in 2026 has been less severe for Indian investors than for global investors, with domestic prices declining 14.9% compared with a 21.4% fall in dollar-denominated gold. Rupee depreciation and higher import duties helped cushion the domestic market against the global downturn. However, persistent geopolitical tensions, elevated oil prices, inflation concerns and expectations of higher US interest rates continue to weigh on gold. The divergence highlights how currency movements and domestic taxation can significantly influence gold returns for Indian investors, even when global prices fall sharply.
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