Gold and silver prices are under pressure as India’s GST Council prepares to discuss ending the long-standing 3% tax exemption on the metals, a move that could lift costs for buyers and dent demand in one of the world’s biggest bullion markets.
India GST review weighs on gold and silver demand
The policy review matters because India is a major consumer of gold and silver for jewelry, investment bars and coins. Any higher indirect tax burden would likely feed through to retail prices, potentially slowing imports and weighing on global bullion demand at a time when investors are already digesting sharp swings in precious metals.
Sentiment IndicatorsⓘProprietary · adalytica.com · October 5, 2026
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Spot gold fell 1.5% to $4,223.95 an ounce in recent trading, while the SPDR Gold Shares ETF, GLD, was last at $379.55, little changed but still well below its 50-day moving average of $396.45 and 200-day average of $416.07. That technical setup suggests the metal has lost momentum after an earlier rally, even as Adalytica’s Gold Fear & Greed Index shows “Extreme Fear” at 3, underscoring how quickly sentiment has turned.
Silver, often more sensitive than gold to shifts in industrial and investment demand, was last at $55.13 an ounce, also below its 50-day average of $57.79 and 200-day average of $65.90. The pullback comes after a volatile run that had pushed silver sharply higher earlier in the year, leaving traders exposed if Indian buying cools.
The broader commodity picture is also mixed. The Invesco DB Commodity Index Tracking Fund, GSG, was last at $35.45, signaling that precious metals weakness is part of a wider reset in commodity positioning rather than an isolated move.
For investors, the key question is whether the GST Council’s October 7 meeting produces only discussion or a formal move toward higher taxation. A change would matter most for bullion dealers, jewelry retailers and importers in India, while bullion producers and funds tied to gold and silver could face another near-term headwind if demand softens further.
| Entity | Gains | Losses |
|---|---|---|
| Indian tax authorities | ▲Higher revenue potential | ▼Lower compliance if demand shifts informal |
| Jewelry buyers and bullion consumers | ▲Short-term uncertainty arbitrage | ▼Higher retail prices |
| Gold and silver traders | ▲Volatility opportunities | ▼Weakness in Indian demand |
| GLD, SLV holders | ▲Safe-haven interest if fear rises | ▼Near-term price pressure from tax risk |
