Gold Price News: Prime Minister Narendra Modi on Sunday appealed to the nation to refrain from buying gold for a year. Despite the decline in buyers, the price of gold is not falling. Learn the reasons behind this.

Gold is expensive, buyers are fewer, yet why is the price not falling?

Gold Import Duty Hike: The Indian government has increased the import duty on gold and silver from 6 percent to 15 percent. The clear objective is to reduce imports and ease pressure on the rupee. Prime Minister Narendra Modi himself has appealed to people not to buy gold for a year. Despite this, the price of gold in the market remains unstoppable.

Gold prices in India opened with a significant surge today, May 13, 2026. Gold prices on the MCX rose 6% to reach approximately ₹1,62,390 per 10 grams. It even surpassed ₹1.64 lakh intraday.

Now the question is, when the government wants to stop procurement and there are fewer buyers, why are prices going up? There are not just one but many answers to this.

The first reason is the impact of the Iran-US war.

Whenever a major global crisis strikes, investors flock to gold. Gold is considered a safe-haven investment. Amid tensions in West Asia, global gold prices are already high. India imports almost all of its gold, so foreign prices directly impact the country.

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The second reason is the increase in import duty itself.

The government increased the duty to make gold more expensive and encourage people to buy less, but the opposite also happens. When the duty increases, the price of gold in the domestic market rises further. Investors who have already purchased gold see increased profits. This also attracts new investors, fearing they will be left behind.

Third reason – investment demand at record levels

In the March quarter of this year, for the first time, demand for gold investment surpassed demand for jewelry. Investment in gold ETFs jumped 186% in a year to a record 20 metric tons. Amid weak returns from the stock market, people chose gold.

The fourth reason is the mindset of the Indian buyer.

Gold prices have risen 443 percent over the past decade, yet annual demand has remained between 666 and 803 metric tons. Even in 2012-13, when the duty increased from 2 to 10 percent, demand remained unchanged. In rural India, gold is a means of saving and a guarantee for loans. It is not easily abandoned.

This is why prices haven't fallen despite fewer buyers. The global crisis, rising import duties, changing investment priorities, and the structure of the Indian market are all holding gold prices higher.