Gold, Silver Prices Surge as Import Duty Hike Impacts Market; MCX Gold Rate Exceeds ₹1.62 Lakh

Indian Precious Metals Rise Amid Import Duty Hike

In the wake of the government's announcement to increase import duties on precious metals, gold and silver prices in India traded with strong gains on Wednesday. The MCX gold rate for June futures contracts opened 1% higher at ₹1,54,851 per 10 grams, compared to its previous close of ₹1,53,442.

Meanwhile, the MCX silver rate for July futures contracts opened 4% higher at ₹2,90,224 per kg, as compared to its previous close of ₹2,79,062. The bullish momentum sustained, resulting in the MCX gold price and silver prices jumping over 6% each.

In the international market, gold prices edged lower due to uncertainty surrounding the US-Iran war and stronger-than-expected US inflation data, which dimmed hopes for Federal Reserve rate cuts. Spot gold price fell 0.4% to $4,695.99 per ounce, while US gold futures for June delivery gained 0.4% to $4,705.30.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The spot silver price rose 0.2% to $86.71 per ounce. To reduce overseas purchases of precious metals and ease pressure on foreign exchange reserves, the central government has raised import tariffs on gold and silver to 15% from 6%.

The basic customs duty on several categories of gold and silver imports has been hiked to 10% from 5%, while the Agriculture Infrastructure and Development Cess (AIDC) of 5% continues, taking the total effective import tax to 15%.