Desi Talk

www.desitalk.com – that’s all you need to know 14 COVER STORY May 15, 2026 . i l . ’ ll I ndian Prime Minister Narendra Modi’s call to avoid gold purchases for a year to help protect foreign exchange reserves fuelled concerns of higher import tariffs on the metal, sending shares of Indian jewel- lery retailers lower. The Iran war has sent oil prices surging and that in turn has resulted in mounting pressure on India’s bal- ance of payments and the rupee. India is the world’s third-largest oil importer and consumer, meeting more than 90% of its crude oil needs and about half of its natural gas demand through imports. Modi’s remarks about gold on Sunday came along with a range of other measures he urged, including fuel conservation, increasing working from home and limits on travel and imports. Gold is in high demand in India, particularly for wed- dings where gold jewellery is seen as a crucial part of a bride’s attire and is a popular gift from family and friends. While it is the world’s second-largest gold consumer, India relies on imports to meet nearly all of its demand. Shares of jewellery makers such as Titan, Senco Gold and Kalyan Jewellers fell between 6% and 9% on Monday. “There are concerns that the government might sharp- ly increase import duty on gold for a year to discourage imports,” said Surendra Mehta, national secretary at the India Bullion and Jewellers Association. “Duties could be raised even higher than levels seen in recent years.” In 2012 and 2013, New Delhi hiked tariffs on gold imports to stabilise a rapidly depreciating rupee. Now, jewellers fear that duty cuts made in 2024 to 6% from 15% to curb smuggling could soon be reversed. A government source said on Monday, however, that India has no plans to raise duties on gold and silver imports. India’s balance of payments is expected to deteriorate sharply this April-March fiscal year to a deficit of about $66 billion to $70 billion, compared with an estimated $26 billion to $28 billion in 2025-26. Pressure on the rupee has prompted the central bank to sell the dollar and limit the size of trading positions that banks can take. It has also clamped down on arbi- trage trades. The Indian rupee closed at a record low of 95.31 to the dollar on Monday. Senior government officials said on Monday India has sufficient gasoline and diesel supplies. But, fuel retailers incur losses of about 100 rupees ($1.05) per litre on diesel and 20 rupees per litre on gaso- line by selling the fuels below market rates. State retailers have not raised gasoline and diesel prices since April 2022. -Reuters G old prices were under pressure on Tuesday as fading hopes for an Iran peace deal pushed oil prices higher, adding to concerns about inflation and the prospect of higher global interest rates. Spot gold fell 1% to $4,685.99 per ounce by 1320 GMT. U.S. gold futures lost 0.7% to $4,693.90. “Higher oil prices are raising the risk that the U.S. central bank and others might have to increase interest rates to fight what would surely emerge as stagfla- tion. So gold is responding to that,” said Bart Melek, global head of commodity strategy at TD Securities. Oil prices rose over 3% as hopes for a peace deal on Iran faded after U.S. President Donald Trump said a ceasefire with Iran was “on life support” as Tehran rejected a U.S. proposal to end the con- flict. [O/R] Data showed that U.S. consumer prices rose for a second straight month in April, resulting in the largest annual increase in inflation in nearly three years and further bolstering expectations the Federal Reserve would keep interest rates unchanged for a while. Although gold is considered a hedge against inflation, higher rates often put pressure on the non-yielding asset. Joni Teves, precious metals strategist at UBS Investment Bank, said they are maintaining a bullish outlook on gold as underlying drivers remain intact. “We still think prices can recover from current levels and continue to make new highs this year,” she added. Focus is also on the Producer Price Index (PPI) scheduled for release on Wednesday and a meeting between Trump and Chinese President Xi Jinping in Beijing, scheduled to run fromThurs- day to Friday. Spot silver fell 2.4% to $84.06 after hit- ting a two-month high earlier. Silver prices jumped on expectations of a widening deficit as demand for physical silver grows, analysts at SP Angel said in a note. They added that higher oil prices are driving increased EV sales, which in turn is likely to boost demand for silver in solar and other renewable energy technologies. Elsewhere, Indian banks have resumed gold and silver imports after a hiatus that stretched for more than a month by agree- ing to pay a 3% customs levy that earlier prompted lenders to halt shipments, sources told Reuters. Platinum eased 1.7% to $2,096.19, and palladium was down 2.4% at $1,473.00. -Reuters By Rajendra Jadhav and Nimesh Vora By Ashitha Shivaprasad Gold Comments By India’s Modi, Oil Shock Stoke Tariff Fears; Jewellery Stocks Slide Gold Dips As Oil Gains Add To Rate Uncertainty Modi’s Gold Advisory Jolts Indian Jewelry Market G old prices reversed course to edge up on Mon- day in volatile trading, as investors assessed de- velopments in U.S.-Iran diplomacy and awaited key U.S. inflation data due later this week. Spot gold was up 0.2% at $4,723.40 per ounce, by 2:02 a.m. EDT (1802 GMT) after falling over 1% ear- lier in the session. U.S. gold futures settled little changed at $4,728.70. “There is just some bargain hunting coming in and positioning ahead of the U.S. inflation data this week,” said JimWyckoff, market analyst at American Gold Exchange. Focus will be on the U.S. Consumer Price Index (CPI) due on Tuesday and the Producer Price Index (PPI) scheduled for release onWednesday. On the geopolitical front, President Donald Trump’s swift rejection of Iran’s response to a U.S. peace proposal has fuelled concerns that the 10-week-old conflict will drag on and continue to paralyse shipping through the Strait of Hormuz, pushing oil prices higher. [O/R] “The setback keeps the ceasefire timeline uncertain and inflation risks elevated – reinforcing the higher-for- longer rate narrative that has weighed on gold through- out the conflict,” ING analysts said in a note. They added that they see prices rising to $5,000/oz by year-end, but the stalling of peace talks adds near-term uncertainty. Global brokerages have scaled back expectations of two U.S. interest rate cuts this year, with forecasts now split between some easing and no cuts at all in 2026. Gold tends to come under pressure despite its safe- haven appeal, as higher rates increase the opportunity cost of holding non-yielding assets. Markets are also watching Trump’s two-day visit to China this week, where he is set to meet Chinese President Xi Jinping to discuss Iran, Taiwan, artificial intelligence and nuclear weapons. Elsewhere, shares of Indian jewellery retailers tumbled after Prime Minister Narendra Modi urged people to refrain from buying gold for a year to protect foreign exchange reserves. India is the second-largest gold consumer. Among other metals, spot silver was up 6.6% at $85.65 per ounce, platinum gained 3% to $2,116.72, and palla- dium added 0.8% at $1,503.11. -Reuters By Ashitha Shivaprasad Prime Minister Narendra Modi addressing the inaugural session of the India AI Impact Summit 2026, February 19, 2026. Saleswomen show gold ornaments and jewellery to customers for purchase inside a Senco Gold & Diamonds jewellery showroom in Kolkata, India, January 28, 2026. PHOTO:NARENDRAMODI.IN PHOTO:REUTERS/BHAWIKA CHHABRA