Gold and silver prices in India jumped over 6% each on Wednesday, after the government increased import duties on the precious metals.
MCX gold rate for June futures contracts opened 1% higher at ₹1,54,851 per 10 grams as against its previous close of ₹1,53,442 level. for July futures contracts opened 4% higher at ₹2,90,224 per kg as compared with its previous close of ₹2,79,062 level.
Buying in precious metals intensified and gold and silver prices hit 6% upper circuit each. was up by ₹9,206, or 6%, at ₹1,62,648 per 10 grams level, while MCX silver price spiked by ₹16,743, or 6%, to ₹2,95,805 per kg.
The central government has to 15% from 6% in an effort to reduce overseas purchases of precious metals and ease pressure on foreign exchange reserves.
According to the circular, the basic customs duty on several categories of gold and silver imports has been increased to 10% from 5%, while the Agriculture Infrastructure and Development Cess (AIDC) of 5% continues, taking the total effective import tax to 15%.
Meanwhile, strong domestic investment demand for gold persisted. Indian gold ETF inflows jumped 186% YoY to a record 20 metric tons in the March quarter.
In the international market, prices edged lower as uncertainty relating to the US-Iran war and stronger-than-expected US inflation data 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. Spot rose 0.2% to $86.71 per ounce.
Traders have largely priced out a Fed rate cut this year, with markets now seeing a 30% chance of a hike by December, according to CME Group’s FedWatch tool.
Investors will watch out for the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping this week. The leaders are expected to discuss the US-Iran war, even as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the .
Gold Price Outlook
According to Anuj Gupta, MCX gold prices may rise to ₹1.68 lakh to ₹1.70 lakh per 10 grams, while silver price may hit ₹3 lakh per kg level.
Jigar Trivedi, Senior Research Analyst at IndusInd Securities suggests buying gold and silver on dips as he expects the bullish momentum to sustain.
Support for MCX gold price is seen at ₹1,59,000 – ₹1,60,000 levels, while resistance is placed at ₹1,65,000 – ₹1,67,000 levels. MCX silver rate may fund support at ₹2,90,000 and resistance at ₹3,10,000 level,” said Trivedi.
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