The Union Budget 2026, presented on 1 February 2026 by Finance Minister Nirmala Sitharaman, drew sharp attention not just from taxpayers and investors – but especially from buyers and traders of gold and silver. These precious metals are deeply woven into Indian culture as jewellery, investment vehicles, and safe-haven assets.
In this guide, we break down how the 2026 Union Budget affects gold and silver, what actually happened on the budget day, and what it means for buyers, investors, and households during weddings and festive seasons.
Why the Union Budget Matters for Gold & Silver
Unlike direct price controls, the Union Budget influences the precious metals market in three key ways:
1. Import Duty & Customs Taxes
Gold and silver are largely imported in India. Any change in customs duty directly alters the landed cost of bullion, which flows through to retail prices.
2. GST and Other Indirect Taxes
While GST on bullion has stabilized, expectations around indirect tax tweaks often surface before budgets – with hopes of relief for consumers.
3. Overall Economic Signals
Budgetary signals on inflation, fiscal deficit, and currency stability affect investor demand for safe-haven metals.
Pre-Budget Expectations & Market Sentiment
Before the Budget, gold and silver prices had surged to record or near-record highs. Investors, industries, and even ordinary buyers were watching for budget measures that could ease costs.
- High prices were partly driven by global uncertainty and domestic demand.
- Traders hoped for import duty cuts or GST relief to temper retail prices.
What Happened on Budget Day (1 Feb 2026)
On the actual budget day:
Market Reaction
- Gold and silver prices plunged sharply in futures trade, hitting lower circuit limits at one stage.
- Gold futures briefly fell around 6 % and silver also slid.
- Domestic markets saw volatility and profit-booking, with rapid swings driven by broader market moves.
Price Movement After Budget
Despite initial drops during budget session:
- Gold recovered some losses and ended the day in green territory.
- Silver remained largely flat, showing cautious trading.
Current Rates
Post-budget, gold and silver prices remained range-bound, reflecting consolidation amid global cues and currency dynamics.
Budget 2026 Tax & Investment Rule Changes
One significant post-budget change relates to how some gold investments are taxed:
Sovereign Gold Bonds (SGBs)
Under the new rules announced in Budget 2026:
- Capital gains tax exemption on SGBs will now apply only to original subscribers who buy directly at issuance and hold until maturity.
- Secondary market buyers or premature sellers won’t qualify for the tax break from 1 April 2026.
This change encourages long-term investment over short-term trading in gold bonds.
What the Budget Didn’t Change
Contrary to some expectations:
- Customs duty on gold and silver was left unchanged, meaning no immediate tax relief for bullion buyers from this budget itself.
This stability likely helped reduce uncertainty for traders and consumers.
What It Means for Buyers & Investors
Here’s a practical breakdown of how people are affected:
Everyday Buyers
- No new tax breaks means jewellery and bullion prices mostly reflect global movements rather than budget windfalls.
- Strong rupee performance and inflation trends will continue to influence costs more than budget policy alone.
Investors
- SGB tax changes make it more favourable to buy at issuance and hold till maturity.
- Spot, ETF, and futures holders will watch global cues closely – especially U.S. interest rates, currency moves, and geopolitical risks.
Long-Term Perspective
While the Union Budget 2026 didn’t dramatically alter customs duty, its emphasis on economic stability, controlled inflation, and fiscal discipline supports steady demand for gold and silver as safe-haven assets.
Key Takeaways
– Union Budget 2026 did not change import duties on gold or silver.
– Prices were volatile around budget day, with steep short-term movements.
– New tax rules on SGBs apply from April and encourage long-term holding.
– Global economic forces continue to have a major impact on bullion prices.
FAQs
Q1: Will gold and silver prices fall because of Union Budget 2026?
Not necessarily – the Budget didn’t reduce customs duty, so prices are mainly shaped by global markets and local demand.
Q2: Are gold investments still attractive in 2026?
Yes – especially Sovereign Gold Bonds (if held to maturity) and long-term physical ownership during uncertain economic times.
Q3: Does GST on gold or silver change with the budget?
There was no GST change announced in the 2026 Budget; GST policy remains stable.
