Domestic gold prices on MCX climbed to Rs 1,49,200 per 10 grams, supported by a 0.5% depreciation in the rupee against the US dollar. While international prices are gaining, physical demand in India remains under pressure due to recent import duty hikes. Investors are now watching upcoming US employment data for further market direction.
What Happened
Gold prices in the Indian market saw a sharp increase on June 22, 2026. On the Multi Commodity Exchange (MCX), prices jumped by nearly Rs 2,000 to touch Rs 1,49,200 per 10 grams. This increase aligns with global trends, where gold prices climbed above $4,210 per ounce on international exchanges.
Why the Rupee Matters for Gold
The primary driver behind this domestic price spike is the weakening of the Indian rupee against the US dollar. The rupee slipped by 0.5 percent to 94.7 against the dollar. Because India imports a significant portion of its gold, the commodity is priced in US dollars globally. When the rupee weakens, it costs more rupees to buy the same amount of gold, which forces domestic prices to rise even if global gold prices remain steady.
Impact of Import Duties on Demand
While prices are rising, physical demand for gold in India has faced significant pressure. Recent data shows that gold imports fell by 39 percent in May to $3.4 billion. This sharp decline is largely linked to the government raising the import duty on gold from 6 percent to 15 percent. This higher tax has effectively increased the cost for local buyers, leading to a noticeable slowdown in physical gold purchases.
ETF Flows and Investor Sentiment
Gold Exchange Traded Funds (ETFs) have shown a changing trend recently. In May, these funds saw record outflows of Rs 7.25 billion. However, the situation shifted in early June, with net inflows of Rs 16.31 billion recorded between June 1 and June 11. This indicates that while physical buyers are cautious due to high prices and taxes, financial investors continue to maintain an interest in gold through ETFs.
What Investors Should Monitor Next
Market participants are now waiting for upcoming US employment data, including non-farm payrolls and unemployment numbers. This data is expected to influence the movement of the US dollar, which acts as a major global driver for gold prices. Locally, investors may watch for seasonal demand patterns. Historically, demand often recovers from August onwards as the wedding and festive season approaches in India.