Same coin, different winners: Gold, silver ETFs jump up to 7% while Titan, Kalyan Jewellers, PC Jeweller slide after import duty hike

Precious Metal ETFs vs Jewellery Stocks: Precious metals remained sharply in focus during today’s trading session after the Government of India increased import tariffs on gold and silver to 15 per cent from 6 per cent, a move expected to significantly raise the cost of importing the two metals.

The revised tariff structure will come into effect from May 13, 2026, according to a gazette notification issued by the Ministry of Finance.

The decision comes days after Prime Minister Narendra Modi urged citizens to reduce gold purchases, particularly for weddings, for nearly a year as part of efforts to conserve foreign exchange reserves amid elevated global oil prices and concerns over external-account stability.

While the policy move has intensified concerns around demand and pricing in the bullion market, its impact across the broader market has been sharply contrasting. Jewellery stocks witnessed heightened volatility amid fears of weaker consumer demand and rising input costs, whereas gold exchange-traded funds (ETFs) attracted investor attention as a safer avenue to gain exposure to rising bullion prices.

The divergence once again highlights the market phrase of “the same coin can show two different sides,” with gold-linked financial instruments and jewellery companies reacting in entirely different ways to the same policy trigger.

Titan Company (Titan Company Share Price)

The share price of the Nifty 50 stocks was up 0.3 per cent or Rs 12.3 to trade at Rs 4,067 as of 12:00 PM. However, the prices went as low as Rs 3,985.10, reflecting a downside of 1.7 per cent from the previous close of Rs 4,055.30.

The stock with Rs 36,522.86 crores was under pressure on the back of the government's move, with jewellery stocks slipping over 2 per cent to trade close to Rs 354.30. The stock slipped as low as Rs 340.10, translating to a downside of around 6 per cent.

Mirroring the same trend as the Titan company, the prices turned green after slipping to Rs 8.15, a downside of 3.8 per cent from the previous close of Rs 8.47.

Senco Gold showed recovery to rise nearly 4 per cent after slipping to Rs 302.05, reflecting a downside of 3.4 per cent in today's trading session.

The stock witnessed a steep decline of nearly 6.5 per cent on Wednesday (May 13). However, the price was trading over 4.5 per cent down at the time of writing this report.

Gold ETFs gained over 5 per cent during the session, while silver ETFs outperformed with gains of up to 7 per cent, reflecting strong investor sentiment amid expectations of higher domestic bullion prices.

The net inflows into gold ETFs stood at Rs 3,040.3 crore in April, marking a 34 per cent rise on a month-on-month basis

When import duty increases, jewellers face higher raw material costs since India relies heavily on imported gold. This squeezes their margins and may reduce consumer demand due to higher prices, hurting their profitability and stock prices.

In contrast, gold and silver ETFs track the price of the metals themselves. As import duty pushes domestic prices higher, the value of these ETFs rises. In short, jewellers are hurt by rising costs, while ETFs benefit from rising gold and silver prices.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)