The government raised import duty on gold and silver to support the falling rupee. Meanwhile, the international dollar index also declined. As a result, gold and silver gained strong support in domestic futures trading. On the Multi Commodity Exchange, gold jumped ₹11,000 per ten grams. Moreover, silver again crossed ₹3 lakh in the futures market.
Experts say both metals have started adjusting prices after the import duty increase. Now, the bigger question concerns the government’s main goal. Will gold demand fall after this duty hike? Also, will gold imports decline in the coming days? If that happens, prices may fall soon.
Gold Surges By More Than ₹11,000 On MCX
Gold prices saw a strong rise on the Multi Commodity Exchange. During the trading session, gold gained over ₹11,000 per ten grams. According to data, gold showed an ₹8,300 rise at 9:35 am. Consequently, the price reached ₹161,742 per ten grams.
Later, gold climbed ₹11,055 during trade and touched ₹164,497. This level also marked the day’s high. Earlier, gold opened at ₹154,851. However, the previous session had closed at ₹153,442.
Silver Crosses ₹3 Lakh Again In Futures Trade
Meanwhile, silver also recorded a sharp jump on the Multi Commodity Exchange. During the session, silver crossed the ₹3 lakh mark. Data shows silver rose ₹22,367 and reached ₹301,429 per kilogram. This level became Wednesday’s peak.
Earlier, silver opened higher at ₹290,224. In comparison, it had closed at ₹279,062 a day before. Also, at 9:45 am, silver traded at ₹296,597. Therefore, it showed a gain of ₹17,535 at that time.
Why Prices Rose After The Import Duty Change
The Indian government increased import tariff on gold and silver from 6% to 15%. This includes 10% basic customs duty and 5% Agriculture Infrastructure and Development Cess. Additionally, global bullion prices found support from uncertainty around the US-Iran war.
Stable US inflation data also supported precious metals. Besides, a possible delay in Federal Reserve rate cuts added further backing. These factors increased demand for gold and silver as safe-haven assets.
The government expects this duty hike to reduce imports. Moreover, it may help narrow the trade deficit. It may also strengthen the Indian rupee, which faced pressure from rising crude oil prices. According to the government circular, basic customs duty rose from 5% to 10% across several import categories. However, the 5% AIDC continues. Therefore, the total effective import tax reached 15%.
International Market Shows A Different Trend
In contrast, international gold and silver prices moved lower. Uncertainty linked to the US-Iran war affected expectations again. Also, stronger-than-expected US inflation data reduced hopes for Federal Reserve rate cuts.
Spot gold fell 0.4% to $4,695.99 per ounce. However, US gold futures for June delivery rose 0.4% to $4,705.30. Meanwhile, spot silver gained 0.2% and reached $86.71 per ounce. Also, futures silver rose over 2% and reached $87.40 per ounce.
What Experts Expect Next
Commodity expert Anuj Gupta said higher customs duty gave support to gold and silver prices. According to him, both metals will adjust their prices with the new duty. Therefore, the next few hours or trading days will show demand direction.
He said the government raised duty to reduce imports. Although prices rose after the increase, he does not expect this rise to last long. In the next few days, gold and silver may see a major fall. However, traders must wait to know the exact scale of that decline.
