Gold, silver ETFs jump up to 15% after import duty hike triggers sharp domestic re-pricing

Gold and silver exchange-traded funds (ETFs) surged up to 15% on Wednesday (May 13) after domestic bullion prices jumped sharply on the Multi-Commodity Exchange (MCX), following the government’s steep hike in import duties on precious metals.

The Centre raised customs duty on gold and silver imports to 15% from 6%, triggering an immediate re-pricing of domestic gold-linked assets to reflect higher import parity.

Among gold ETFs, Quantum Gold Fund led gains, rising nearly 15% to ₹143.37 from ₹124.90.

Tata Gold ETF gained 12%, while Zerodha Gold ETF rose about 9%.

Silver ETFs also rallied strongly, gaining up to 10%, with HDFC Silver ETF and UTI Silver ETF among the top performers.

Analysts said the move reflects a mechanical adjustment rather than a fresh demand-driven rally.

Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities Limited, said the duty hike is a “measured policy response to a genuine forex challenge,” adding that domestic prices are now re-aligning to a new import parity level.

He noted that gold and silver in India will continue to be driven by global bullion prices, USD/INR movement, and domestic premiums, while the duty has now effectively become a sunk cost embedded in pricing.

Experts said ETFs are tracking domestic bullion more closely after the duty hike widened the gap between international and Indian prices.