Gold and silver prices in India have decreased from their record highs reached last week yet investors maintain strong interest in the upcoming Union Budget scheduled for February 1. The market has experienced a minor decline which now provides buyers with opportunities to purchase assets during price reductions.

The current market price of MCX February gold futures stands at ₹1.69 lakh per 10 grams which represents a decline from the intraday high of approximately ₹1.80 lakh recorded on January 29. Silver prices have experienced a smaller decrease as MCX March silver futures declined from ₹4.08 lakh per kg to approximately ₹4.05 lakh.

International gold futures have followed the same pattern as global markets because they reached $5,600 per ounce before their recent price drop yet their value still remains above the January 1 price. Silver prices abroad have also pulled back after profit booking. The gap between Indian bullion prices and global bullion prices has increased because of this discrepancy which traders currently observe.

The Indian economy faces serious problems because it depends on foreign sources for more than 80 percent of its silver and gold needs. The Indian economy experienced a severe trade deficit last year because foreign exchange outflows reached high levels while bullion purchases increased which caused the rupee to reach its lowest point in history.

The current demand patterns show that jewellery sales have decreased because of high prices while investment demand has increased. Gold ETF assets reached three times their previous value in 2025 when investors added more than ₹40,000 crore through net inflows. Silver ETFs have experienced even faster growth because investors seek gold alternatives while the equity market shows weak performance.

Budget Implications

Market speculation ahead of the Budget centers on potential changes in import duties. The duty increases during the years 2012 and 2013 which occurred when the rupee lost value caused prices to rise. The government reduced gold and silver import duties from approximately 15% to about 6% during the previous year to combat smuggling and to match domestic prices with international market rates. Industry groups are advocating further reductions while policymakers consider how high import levels affect the rupee exchange rate.

Jewellers are watching closely. Jaipur Jewellers Association member Manish Khunteta notes that any relief in customs duty would benefit both buyers and sellers, especially as elevated prices strain household budgets. Experts have also suggested increasing the ₹2 lakh PAN threshold for jewellery purchases, as even routine wedding buys now exceed this limit.

For now, the basic customs duty on gold remains at 6%, with no official announcement on changes. The February 1 Budget could influence bullion prices sharply when trading resumes, potentially offering investors a second chance to enter the market.