Gold prices declined by ₹2,800 to ₹1.62 lakh per 10 grams in Delhi on Tuesday as military tensions between Washington and Tehran drove investors towards the US dollar. According to the All India Sarafa Association, the yellow metal of 99.9% purity depreciated to ₹1,62,400 per 10 grams (inclusive of all taxes), down from ₹1,65,200 per 10 grams on Monday. As per CNBC TV18, this decline reflects broader market uncertainty surrounding US-Iran negotiations and their potential impact on global energy markets. Latest Bloomberg reports show bullion was near $4,510 an ounce in early trading, having fallen 1.4% on Tuesday.
The price decline was triggered by escalating US-Iran tensions, with reports of fresh US military strikes on southern Iran despite ongoing negotiations in Qatar aimed at preserving a seven-week-old ceasefire. The United States Central Command stated that the operations were defensive in nature and did not signal an end to the ceasefire arrangement. Meanwhile, Iran's Islamic Revolutionary Guard Corps claimed that it had shot down a US drone that entered Iranian airspace, adding another layer of uncertainty to already fragile negotiations. According to HDFC Securities, with no breakthrough on the diplomatic front, market participants largely stayed on the sidelines, avoiding aggressive positions and waiting for clearer signals on the geopolitical front. Bloomberg reports that hostilities between US and Iranian forces near the Strait of Hormuz occurred even as both sides touted progress toward an interim peace deal, with US Secretary of State Marco Rubio saying that any pact would likely take a few days to finalize.
While gold declined, silver demonstrated resilience by rising ₹2,000 to ₹2,73,000 per kilogram (inclusive of all taxes), up from ₹2,71,000 per kg in the previous session. As per CNBC TV18, this contrasting performance reflects different market dynamics and investor sentiment toward the two precious metals. The renewed tensions have pushed crude oil prices higher, reviving fears that elevated energy costs could sustain inflationary pressures globally and force central banks to maintain tighter monetary policy for longer. Latest Bloomberg data shows silver gained 0.5% to $77.25, with platinum and palladium also rising, indicating broader precious metals strength.
In international markets, spot gold edged up 0.1% to $4,514.48 an ounce as of 7:37 a.m. in Singapore, while silver gained 0.5% to $77.25. According to Bloomberg, the risk-on mood has lifted equities to fresh highs despite ongoing geopolitical tensions. TD Securities analyst Ryan McKay noted that "while hope of a US-Iran deal has offered some support, the situation remains fragile and persistent, as inflation fears continue to loom over precious metals." Bloomberg reports that bullion has slumped around 15% since the conflict erupted in late February, with traders ramping up rate-hike bets as the war sent energy prices soaring and fanned inflation concerns. The Bloomberg Dollar Spot Index was little changed after ending the previous session 0.1% higher.
Indians rushed to purchase gold across multiple formats following the near doubling of import duty on gold purchases. Starting May 13, 2026, the basic customs duty on gold was enhanced to 10% (from 5% earlier), while the agriculture, infrastructure and development cess was raised to 5% (from 1% earlier). This led to an increase in overall gold import duty to 15%, matching the rate from 2022. According to reports from Mint, this followed the Prime Minister's earlier nudge to avoid gold purchases for a year to preserve foreign exchange reserves and curb currency depreciation.
The price increases are reinforcing gold as an investment option, with global gold buying by individuals and central banks at historical highs after 1,237 tonnes purchased in 2025. According to Mint, Hardaman Singh Seth from Mirae Asset Investment Managers expects another 750-850 tonnes of buying in 2026. However, tax implications remain significant - selling gold within one year adds the entire gain to income tax, while long-term capital gains (over 24 months) are taxed at 12.5% without indexation benefits. Paras Savla from KPB and Associates warns that absence of proof of acquisition cost can result in entire sale proceeds being treated as income.
