India’s gold market just delivered a masterclass in unintended consequences. MCX gold futures dropped 1.93% on June 10 to ₹149,500 per 10 grams, their lowest level since May 5, effectively erasing every rupee of price increase triggered by the government’s aggressive import duty hike less than a month earlier.
The duty hike that backfired
Between May 12 and 13, India raised the effective import tariff on gold and silver from 6% to 15%. That’s the largest single increase on record for Indian gold duties.
The rationale was straightforward enough. Curb gold imports, support the rupee, and give the national currency some breathing room. For about five minutes, it worked. Domestic prices spiked on the tariff news.
Then global gold prices started sliding, and the math stopped mathing.
