Gold prices jump ₹160 in two days; silver rates gain ₹400 a kg today1 min read . Updated: 17 Dec 2019, 09:48 AM IST
- A day after jumping by ₹124, gold prices gained ₹33 today
- Silver rates, too, increased sharply today by ₹399
NEW DELHI : Amid fears that the GST Council might increase the goods and services tax (GST) rate on jewellery, gold prices are now on an upswing in India. A day after jumping by ₹124, gold prices gained ₹33 today. 10 grams of gold futures now cost ₹37,904 on MCX.
Silver rates, too, jumped sharply today by ₹399. Silver futures for March was being sold at ₹44,525 a kg on the MCX. Silver prices had increased by ₹124 yesterday.
Abhishek Bansal, Chairman, ABans Group of Companies, said if the government increases the GST rate on jewellery, it will be negative for the bullion industry, as gold is already burdened with a 12.5% import duty and a 3% GST.
"It will further increase the cost of jewellery. Gold dealers are offering a discount in India as demand during the peak wedding season did not pick-up mainly due to higher prices and distress in the rural economy. Gold demand will be dented further in case of a government increase of GST on bullion jewellery," Bansal said.
Gold, considered a safe investment in times of political and economic uncertainty, has gained about 15% this year, mainly driven by the 17-month-long tariff war between the US and China and its impact on the global economy. Now with the two major global economies announcing a partial trade deal, gold has become less attractive. US President Donald Trump has cancelled and reduced tariffs in exchange for Chinese pledges to increase purchases of US exports and reform its trade practices.
However, with differing views of Chinese and U.S. officials on the phase one of the trade deal coming to the fore, gold prices were little changed in the international market today as investors preferred to wait for clarity before taking positions. Spot gold was trading at $1,475.74 per ounce by 0044 GMT. U.S. gold futures were flat at $1,480.20.
"In the precious metals space, we are not seeing much going on in either gold or silver, as the negative impact of the trade news has been more than offset by the sharp drop in the general dollar index, keeping values relatively steady," YES Securities said in a report.