Gold falls 21% globally but only 15% in India: How the rupee protected investors

Gold's sharp correction in 2026 has exposed a striking difference between international and Indian bullion markets. While global gold prices declined 21.4% in dollar terms between January 30 and October 30, domestic prices fell only 14.9% in rupee terms, according to a November 2026 report by Axis Mutual Fund titled Gold & Silver: From Euphoria to Equilibrium.

The 6.5 percentage-point difference highlights how currency movements and government policies can influence returns for Indian gold investors, independent of global price trends.

Why did Indian gold prices fall less?

According to Axis Mutual Fund, two factors helped cushion domestic gold prices: rupee depreciation and higher import duties.

The rupee weakened from approximately ₹89 to ₹96 against the US dollar during 2026. Since international gold is priced in dollars, a weaker rupee increases its domestic cost, partly offsetting declines in global bullion prices.

For example, if international gold prices decline 10% while the rupee depreciates 5%, the effective decline in rupee terms would be approximately 5.5%, assuming other factors remain unchanged.

The second factor was the increase in gold import duty from 6% to 15% in March 2026, as cited by Axis Mutual Fund. Higher duties increase the landed cost of imported gold, providing additional support to domestic prices.

However, these factors do not eliminate investment risks.

Global correction vs Indian market performance

Gold prices rebound in November

Domestic gold prices have also witnessed substantial fluctuations in November.

According to the supplied daily price data, 24-karat gold increased from ₹1,38,880 per 10 grams on November 1 to ₹1,44,600 on November 9, a gain of ₹5,720, or approximately 4.12%.

Similarly, 22-karat gold rose from ₹1,27,300 to ₹1,32,550 per 10 grams, an increase of ₹5,250, or 4.12%.

Gold prices in India: November 1–9, 2026

Prices climbed sharply until November 5, when 24K gold reached ₹1,46,020, before correcting and subsequently recovering.

Why Axis Mutual Fund remains bullish

Despite the correction, Axis Mutual Fund maintains a structurally and tactically bullish outlook on gold.

The fund house believes the US Federal Reserve could stop raising interest rates sooner than financial markets anticipate.

While futures markets were pricing approximately 2.3 additional rate hikes through September 2027, Axis MF expects the Fed to stop around 4.25%.

An earlier pause could weaken the dollar and reduce real yields, potentially supporting gold prices.

Central bank demand also remains supportive. According to the report, net central bank gold purchases increased from 57 tonnes in the first quarter of 2026 to 289 tonnes in the second quarter.

What should Indian investors watch?

Axis Mutual Fund cautions that the protection provided by currency depreciation and import duties is not permanent.

A strengthening rupee would make imported gold cheaper, while any reduction in import duties could lower domestic prices even if international bullion prices remain stable.

Conversely, continued rupee weakness could support Indian gold prices.

For investors, the key takeaway is that gold returns depend not just on international bullion movements but also on exchange rates, import duties and domestic market conditions.

Axis MF favours measured, staggered investments, with gold serving as a core portfolio diversifier rather than a short-term speculative bet.