Mumbai, Jan 28, 2026, 14:46 IST
- Gold hit a record $5,311.31 an ounce as the dollar slid ahead of the Fed’s decision.
- India’s bullion market touched fresh peaks, with gold above 160,000 rupees per 10 grams and silver above 360,000 rupees per kg.
- Traders are bracing for a possible rise in India’s import duties after 2025 gold imports climbed to $58.9 billion and silver imports to $9.2 billion.
Gold broke through $5,300 for the first time on Wednesday as the U.S. dollar slid toward a near four-year low ahead of the Federal Reserve’s policy decision. Spot gold hit a record $5,311.31 and was trading around $5,305, while silver was at about $115 after touching $117.69 earlier this week. Kelvin Wong, a senior market analyst at OANDA, pointed to gold’s “very strong” inverse link to the dollar, while Tastylive’s Ilya Spivak said markets were “getting defensive” before Fed Chair Jerome Powell speaks later in the day. 1
The surge is already rippling through India, where gold and silver jumped to record highs in the spot market on Tuesday, tracking global gains during the long weekend. Gold traded above 160,000 rupees per 10 grams and silver above 360,000 rupees per kg, with futures on India’s Multi Commodity Exchange (MCX) also near peaks before easing late in the session. “Silver now derives nearly two-thirds of its demand from industrial uses,” Kotak Mutual Fund wrote, flagging strong consumption from sectors such as solar, electronics and electric vehicles alongside tight supply. 2
That price shock is sharpening the policy debate because India is a giant buyer that imports almost all its gold and more than 80% of its silver, making the import bill a direct hit to the trade balance and foreign-exchange buffers. Gold imports rose 1.6% to $58.9 billion in 2025 and silver imports jumped 44% to $9.2 billion, and trade and industry officials say the government could raise import duties in the coming weeks. Investment demand has stayed firm despite expensive jewellery, with inflows into gold exchange-traded funds (ETFs) — funds that trade like shares and hold physical bullion — jumping 283% in 2025 to a record 429.6 billion rupees, the report said. 3
Gold had already jumped more than 3% on Tuesday, pushing further into record territory as investors looked for shelter from geopolitical and economic turbulence. “Rallies normally end when the drivers dissipate — and that’s not the case,” Bank of America commodities strategist Michael Widmer said. Reuters also cited fresh worries around new U.S. tariff plans and the risk of a partial U.S. government shutdown ahead of a January 30 funding deadline, while Citi upgraded its short-term silver price forecast to $150 an ounce. 4
In India’s futures market, Kedia Advisory said gold settled 1.07% higher at 157,699 rupees, describing demand as driven by a mix of trade and geopolitical risks. The advisory pointed to tariff threats — including potential higher U.S. levies on autos and other goods — and said investors were watching Powell for clues on where U.S. rates go next. It also cited strong central bank buying and ETF inflows as support for the broader move. 5
Safe-haven buying is the simple idea underneath the price action: when investors lose confidence in growth, politics or currencies, they tend to park money in assets they expect to hold value. The day’s focus is the Fed, because gold typically does better when rates are stable or falling, since the metal pays no interest.
Silver is running on a different fuel mix. It is both a store-of-value trade and an industrial input, so the rally pulls in speculators at the same time manufacturers are chasing supply for energy and electronics supply chains.
But the rally has obvious tripwires. A hawkish surprise from the Fed, a rebound in the dollar, or even a pause in risk headlines could trigger profit-taking after a steep run, and Indian policymakers risk pushing more trade into informal channels if duties rise sharply and domestic premiums widen.
Other precious metals have moved with the tide, with platinum and palladium also higher in recent sessions, underlining that the bid is not just about jewellery demand. That matters for India too, since stronger prices across metals lift import costs even if volumes cool.
For investors, the next few hours hinge on the Fed decision and Powell’s tone, with the dollar as the main transmission line into bullion. In India, traders will be watching for any signal that customs duties could change, because that would quickly reshape local prices, premiums and the flow of imports.
