India's Gold and Silver Prices Surge Nearly 7% Following Duty Hike
Austerity drive: Duty hike pushes up bullion prices by 7%
The Economic Times
Image: The Economic Times
Gold and silver prices in India rose nearly 7% on Wednesday after the government increased import duties on these metals from 6% to 15%. This move aims to reduce foreign exchange pressure and curb imports, impacting consumer demand significantly.
- 01Gold prices increased by 6.3%, reaching ₹1,63,165 per 10 grams.
- 02Silver prices surged 6.97%, hitting ₹2,95,805 per kg.
- 03The government raised import duties on gold and silver to 15% effective May 13.
- 04Analysts predict a potential drop in annual gold demand by around 57 tonnes due to the hike.
- 05Geopolitical tensions are contributing to the volatility in precious metal prices.
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On Wednesday, gold and silver prices in India surged nearly 7% following the government's decision to raise import duties on these precious metals from 6% to 15%. Gold prices on the Multi Commodity Exchange climbed by 6.3%, reaching ₹1,63,165 per 10 grams, while silver prices soared 6.97% to ₹2,95,805 per kg. In Mumbai's spot market, gold jumped to ₹1.6 lakh per 10 grams from ₹1.51 lakh, and silver increased by ₹22,000 to ₹2.64 lakh per kg. This duty hike, effective May 13, includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC), aimed at curbing overseas purchases and supporting the Indian rupee. Analysts suggest that this increase could lead to a reduction in consumer gold demand by approximately 57 tonnes annually, based on World Gold Council data. The rise in prices is also influenced by geopolitical tensions, particularly following statements from US President Donald Trump regarding the Iran war ceasefire.
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The increase in gold and silver prices could lead to higher costs for consumers, affecting those looking to purchase these metals for investment or jewelry. This may also influence the overall demand for gold in the country.
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