Gold and silver prices in India jumped over 6% each on Wednesday, after the government increased import duties on the previous metals.
The central government has raised import tariffs on gold and silver to 15% from 6% in an effort to reduce overseas purchases of precious metals and ease pressure on foreign exchange reserves.
The government has increased the basic customs duty on several categories of gold and silver imports to 10% from 5%, while the Agriculture Infrastructure and Development Cess (AIDC) of 5% continues, taking the total effective import tax to 15%.
In the international market, gold 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 silver rose 0.2% to $86.71 per ounce.
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.
