Gold prices hit record high as Budget 2025 sparks commodity market moves

Gold prices surged to new highs following the Union Budget 2025, reflecting investor sentiment and policy shifts. Finance Minister Nirmala Sitharaman’s announcement of an income tax exemption for individuals earning up to Rs 12 lakh has boosted disposable income, potentially increasing household demand for gold. The yellow metal, a traditional safe-haven asset, saw increased interest, pushing its price beyond Rs 84,900 per 10 grams.

Other commodities also experienced volatility, with crude oil, agricultural products, and industrial metals reacting to budgetary provisions. The policy direction towards infrastructure growth and energy transition influenced metal prices, while measures to promote domestic manufacturing played a role in the fluctuations seen in base metals.

Jewellery Stocks Rally Amid Policy Expectations

Jewellery stocks, including Kalyan Jewellers, Senco Gold, and Thangamayil Jewellery, gained up to 4 per cent as investors reacted positively to increased purchasing power among consumers. The previous year’s import duty reduction on gold from 15 per cent to 6 per cent had already fueled a rally in jewellery stocks, with some stocks surging over 100 per cent. Industry expectations for a further cut to 3 per cent in this Budget, however, remained unfulfilled.

The lack of fresh incentives for the gold monetisation scheme also left some industry players disappointed. Experts believe that making the scheme more attractive could have encouraged households to utilise their idle gold holdings, reducing the country’s reliance on gold imports and helping to narrow the current account deficit.

Commodity Markets See Mixed Reactions

While gold prices hit record highs, other commodities saw mixed movements. Crude oil remained range-bound amid global cues, while industrial metals like copper and aluminium faced selling pressure. Agricultural commodities, particularly edible oils and pulses, showed resilience as the Budget focused on agricultural support schemes and rural development initiatives.

With increased liquidity among taxpayers and unchanged import duty on gold, market analysts expect sustained demand for the precious metal in the coming months. However, investors will closely monitor any future policy changes that may influence gold prices and the broader commodity landscape.