Post-budget slide: Retail gold rates fall across major jewellery brands despite ‘no major tax changes’

Hyderabad: Gold prices continued to decline on Monday following the Union Budget 2026 presentation, with retail rates falling across leading jewellery brands and benchmark bullion indicators.

The slide comes despite limited direct tax changes on physical gold and silver, though revised rules around Sovereign Gold Bonds (SGBs) have influenced investor sentiment and trading behaviour.

Searching for reasons behind the fall

Data from major jewellery retailers and the India Bullion and Jewellers Association (IBJA) shows a broad-based drop across gold purities, prompting questions about the reasons behind the fall and whether the trend will continue.

Gold rates fall across leading jewellery brands

Retail gold jewellery prices dropped across major national brands on February 2, compared to the previous day.

22K gold jewellery rates (per gram):

• Tanishq: Rs 13,930 — down from Rs 14,760 on Sunday

• Malabar Gold & Diamonds: Rs 13,490 — down from Rs 13,890

• Joyalukkas: Rs 13,890 — current listed retail rate

Retail prices vary by brand due to sourcing patterns, making charges and logistics, but the downward movement is consistent across sellers.

“We are seeing a correction-led price reset rather than a collapse in demand. Walk-ins have actually increased after the drop because buyers who were waiting are now enquiring again,” said Hyderabad Jeweller, Anurag Bansal, speaking to NewsMeter.

IBJA benchmark gold rates show a sharp daily drop

IBJA benchmark rates, used widely as a bullion reference, recorded a significant one-day fall across all purities on February 2 (rates without GST, typically quoted per 10 grams).

IBJA benchmark rates, February 1 vs February 2:

• Fine Gold (999): Down by Rs 643

• 22 Karat: Down by Rs 627

• 20 Karat: Lower versus previous day

• 18 Karat: Declined

• 14 Karat: Down by Rs 415

These benchmark figures exclude GST and making charges. Final consumer prices are higher depending on the city and retailer pricing structures.

Shantanu Raghavan, a bullion trade analyst, said, “The IBJA move shows this is not brand-specific discounting. The fall is visible at the benchmark level, which means futures positioning and wholesale trades are driving the change.”

Budget 2026: What changed for gold and silver?

The Union Budget did not introduce major new tax rules directly affecting the purchase of physical gold or silver. However, a key change was announced for Sovereign Gold Bonds (SGBs).

Under the revised rule:

• Capital gains tax exemption applies only if SGBs are subscribed to at the original issue and held till maturity

• SGBs purchased later from the secondary market will be taxed at the investor’s slab rate

Tax advisors say this reduces the relative advantage of secondary-market SGB purchases and may have triggered portfolio reshuffling among some investors.

Why have gold prices slashed?

Experts attribute the fall to several overlapping factors:

• Profit booking after earlier highs

• Adjustment in rate-cut expectations globally

• Stronger bond yields reduce gold’s appeal

• Short-term speculative unwinding

• Budget-related tax clarification on SGBs

“Gold had built up a premium on expectation and momentum. Once those expectations softened, leveraged positions exited quickly. That amplified the downside,” said Bansal.

Why is the market so unstable?

Gold is currently reacting to rapid macroeconomic signals rather than steady physical demand trends.

Key drivers of instability include:

• Interest rate outlook in major economies

• Currency fluctuations

• Geopolitical conflict signals

• Fund and ETF flows

• Futures market stop-loss triggers

What is driving the current uncertainty?

Market participants point to three uncertainty layers:

Policy Signals: Mixed interpretations of global and domestic policy direction are affecting asset allocation.

Position Unwinding: Large speculative positions built during the rally are being reduced.

Cross-Asset Competition: Higher yields in fixed-income products are temporarily drawing money away from non-yielding assets like gold.

Will gold continue to drop?

Analysts say further volatility is possible, but continued sharp declines are not guaranteed.

Retail jewellers also report early signs of dip-buying.

“Consumers who postponed wedding and festival purchases are re-entering at these levels. That typically creates a price floor over time,” said Krish Mittal of Ganesh Jewellers, Hyderabad.

Will silver prices go up?

Silver may not follow gold exactly because it has strong industrial usage in addition to investment demand. If industrial outlook and manufacturing demand improve, silver can outperform gold. However, it also tends to be more volatile.

“Silver reacts to both economic growth expectations and precious metal sentiment. That makes its moves sharper in both directions,” said Mittal.

How gold jewellery prices are calculated

Jewellers follow a standard pricing formula:

Final jewellery price = (Gold rate × weight in grams) + making charges + 3% GST + hallmarking charges

• Making charges vary by design and craftsmanship

• GST is applied to the total value

• Hallmarking certifies purity

• City and brand variations apply

Hallmarked jewellery provides third-party purity assurance to buyers.

When should people buy gold and silver?

Experts advise against trying to catch the exact bottom. Instead, they recommend phased buying.

Suggested approach:

• Buy in small quantities across price dips

• Avoid lump-sum purchases during volatile sessions

• Match buying to purpose, jewellery, savings or investment

• Track macro and rate signals rather than daily noise

Outlook

Gold prices have corrected following the Budget developments and broader market repositioning. Benchmark and retail rates both show a clear drop. Analysts expect continued volatility in the near term, with stabilisation likely as speculative pressure reduces and physical demand responds at lower price levels.