Gold Prices Surge Past ₹1.62 Lakh per 10 Grams Amid Silver Price Rally Following Import Duty Increase
Gold and silver prices in India surged over 6% on Wednesday following the government’s substantial increase in import duties on these precious metals. The MCX gold rate for June futures opened 1% higher at ₹1,54,851 per 10 grams, compared to a previous close of ₹1,53,442. Similarly, the MCX silver rate for July futures jumped 4% to open at ₹2,90,224 per kg, up from ₹2,79,062. This sharp upward movement led to both metals hitting the 6% upper circuit, with MCX gold soaring by ₹9,046 to ₹1,62,488 per 10 grams and silver rising by ₹17,738 to ₹2,96,800 per kg.
The driving force behind this market shift is the Indian government’s decision to raise import duties on gold and silver from 6% to 15%, which comprises a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC). The government’s aim is to curb overseas purchases of precious metals, alleviate pressure on foreign exchange reserves, and strengthen the rupee. This policy is likely to dampen immediate demand for precious metals in India; however, domestic buying interest persists, buoyed by a 186% year-on-year increase in Indian gold ETF inflows during the March quarter.
Short-term outlook for traders and investors indicates a bullish tone, with analysts forecasting that MCX gold prices could rise to ₹1.68 lakh to ₹1.70 lakh per 10 grams while silver prices may reach around ₹3 lakh per kg. Support levels for MCX gold are observed at ₹1,60,000, while resistance is found between ₹1,65,000 and ₹1,67,000. Market dynamics could see temporary profit-taking after the initial spike, with potential retracements setting a stage for range-building. As the effects of the duty hike fully materialize, volatility in both metals is expected; traders are advised to buy on dips while remaining cautious of sharp price escalations impacting retail jewelry demand.
Source: Market Source
(Expert Note: This report was independently prepared by the Wealthova Commodities team.)