Why gold is down on MCX today, May 14: Profit-taking, Trump-Xi talks and Iran ceasefire hopes weigh after Rs 9,000 surge

Gold prices eased on MCX on Thursday, May 14, as traders booked profits after one of the sharpest single-day rallies seen in India’s domestic gold market in recent years. The pullback came after a duty-hike-led surge on May 13, when gold prices jumped sharply across futures and physical markets.

MCX gold futures for June 2026 delivery fell Rs 1,159 or 0.7% to Rs 1,61,027 per 10 grams in early trade. Internationally, front-month gold closed 0.4% higher at $4,697.70 per troy ounce on May 13, holding near elevated levels, while domestic MCX prices saw mild consolidation after the previous session’s sharp rally.

Why gold surged on May 13

Gold’s sharp move on May 13 was driven by two major triggers.

The first and strongest factor was the India-specific import duty hike. The government raised customs duty on gold, silver and precious metals from 6% to 15%, effective midnight May 13. The revised structure includes 10% basic customs duty and 5% Agriculture Infrastructure and Development Cess.

The duty hike immediately raised the landed cost of imported gold in India. As a result, MCX gold hit an intraday high of Rs 1,64,497 per 10 grams, while physical market rates across Indian cities jumped by around Rs 1,391 per gram, or nearly Rs 13,910 per 10 grams, in a single day.

The second factor was global safe-haven demand. Gold had already been supported by the Middle East conflict, Brent crude prices above $105 per barrel, concerns around the Strait of Hormuz and hot U.S. inflation data. U.S. CPI stood at 3.8% year-on-year, the highest since 2023, reinforcing gold’s appeal as an inflation hedge. The rupee also touched a fresh all-time low of 95.63 against the U.S. dollar, further lifting domestic gold prices in rupee terms.

Why gold is down today

The May 14 fall is mainly due to profit-taking after an exceptional single-day move. A Rs 9,000 per 10 grams surge in one session is an outsized rally, and traders appear to be locking in gains at elevated levels.

The pullback, however, remains limited. Gold has given up less than 1% after the sharp rise, meaning it continues to retain a large part of the previous session’s gain.

Markets are also tracking the Trump-Xi summit in Beijing. Any signs of progress in reducing U.S.-China trade tensions could reduce the safe-haven premium that has supported gold prices. Until clear outcomes emerge, traders are taking a cautious approach.

Iran ceasefire speculation is another factor. Any indication of diplomatic progress around the Iran-U.S. conflict could reduce geopolitical risk premiums, ease crude oil concerns and reduce some safe-haven demand for gold.

Globally, gold is also facing mild pressure from stronger U.S. CPI and PPI data, which supports expectations that the Federal Reserve may keep interest rates higher for longer. Higher interest rates can act as a headwind for gold because the metal does not offer yield.

Is the gold rally over?

The current decline appears to be a consolidation after an extraordinary move, not a clear reversal. Domestic gold prices continue to be supported by the higher import duty, rupee weakness, geopolitical risks and strong investor interest in gold-linked products.

The new 15% import duty has created a higher domestic price premium for gold in India. Gold imports in FY26 surged 24% to around $71.98 billion, making gold more than 9% of India’s total import bill. The duty hike is aimed at reducing import demand, which could keep domestic supply tighter and prices elevated.

India’s gold ETF inflows also rose 186% year-on-year in the March quarter to a record 20 metric tonnes, and the higher duty on physical imports may further accelerate interest in paper gold. For MCX gold, near-term support is around Rs 1,55,000 per 10 grams, while a sustained hold above Rs 1,60,000 could confirm a new post-duty price floor.

Overall, gold is down on May 14 because of profit-taking, Trump-Xi summit caution, Iran ceasefire hopes and mild global pressure from U.S. inflation data. However, domestic support remains strong after the import duty hike and rupee weakness.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to consult a registered financial advisor before making any investment decisions. Author or Fingo does not hold any position in the securities or commodities mentioned.