Global gold prices experienced their sharpest June fall since 2008, marking the biggest monthly decline in 18 years [5].

This volatility creates a complex market in India, where domestic prices remain elevated compared to global benchmarks. The gap is driven by government fiscal policy and currency fluctuations, forcing consumers to rely more heavily on asset exchanges to afford jewelry.

Anantha Padmanaban, Managing Director of NAC Jewellers, said India gold is at a premium to global prices because of the higher import duty and the depreciation of the rupee [1]. This premium is further influenced by a significant policy shift in May 2026, when the government raised import tariffs on gold to 15% from six percent [1, 3].

These tariffs have created stark disparities in the trading landscape. While premiums for Indian gold have remained firm at $15-$20 per ounce [3], discounts for some Indian dealers jumped to a record $207 per ounce following the tariff hike [3].

Local markets felt the impact of the broader global trend throughout the month. Gold and silver prices fell across major Indian cities, including Delhi, Mumbai, Chennai, and Kolkata, on June 11 [6]. The global decline was driven by geopolitical tensions in West Asia and mixed signals regarding the U.S. dollar [4].

Jewelry retailers are seeing a shift in consumer behavior as a result of these high costs. Old-gold exchange offers now constitute 30% to 50% of overall jewelry buying [7]. This trend suggests that buyers are increasingly swapping existing assets rather than purchasing new gold with cash.

Industry reports indicate that the combination of sharp price falls and subdued demand is expected to exert pressure on the margins of jewelry companies [2].

“Gold posted its sharpest June fall since 2008, the biggest monthly decline in 18 years.”

The divergence between global gold prices and Indian domestic rates highlights the impact of protectionist trade policies on consumer behavior. By raising import duties to 15%, the Indian government has effectively decoupled the local market from global downward trends, making gold more expensive for the end-user regardless of international price drops. The surge in old-gold exchanges indicates a liquidity crunch among consumers, where the only viable way to acquire new jewelry is through the liquidation of existing gold assets.