Gold rate today: MCX gold rate jumps above ₹1.62 lakh per 10 grams, silver price rallies 6% after import duty hike

Gold and silver prices in India jumped over 6% each on Wednesday, after the government increased import duties on the precious metals.

MCX gold rate for June futures contracts opened 1% higher at ₹1,54,851 per 10 grams as against its previous close of ₹1,53,442 level. MCX silver rate for July futures contracts opened 4% higher at ₹2,90,224 per kg as compared with its previous close of ₹2,79,062 level.

Buying in precious metals intensified and gold and silver prices hit 6% upper circuit each. MCX gold rate was up by ₹9,046, or 5.90%, at ₹1,62,488 per 10 grams level, while MCX silver price spiked by ₹17,738, or 6.36%, to ₹2,96,800 per kg.

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.

According to the circular, the basic customs duty on several categories of gold and silver imports has been increased to 10% from 5%, while the Agriculture Infrastructure and Development Cess (AIDC) of 5% continues, taking the total effective import tax to 15%.

“The sharp hike in import duty on bullion from 6% to 15% has triggered a strong ‘bullish event shock’ for MCX gold and silver, as higher duties immediately raise domestic landed costs and widen India’s premium over global prices,” said Kaveri More, Commodity Analyst - Technical Research at Choice Broking.

Meanwhile, strong domestic investment demand for gold persisted. Indian gold ETF inflows jumped 186% YoY to a record 20 metric tons in the March quarter.

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.

Traders have largely priced out a Fed rate cut this year, with markets now seeing a 30% chance of a hike by December, according to CME Group’s FedWatch tool.

Investors will watch out for the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping this week. The leaders are expected to discuss the US-Iran war, even as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the Strait of Hormuz.

More said gold is the more stable long bias, while silver is the higher-beta trade. With higher domestic prices may dampen jewellery and retail demand if the rally turns excessively sharp, while a quicker normalization in import flows and faster adjustments by banks and importers could help cool the initial price spike.

Gold Price Outlook

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.

Jigar Trivedi, Senior Research Analyst at IndusInd Securities suggests buying gold and silver on dips as he expects the bullish momentum to sustain.

Support for MCX gold price is seen at ₹1,59,000 - ₹1,60,000 levels, while resistance is placed at ₹1,65,000 - ₹1,67,000 levels. MCX silver rate may fund support at ₹2,90,000 and resistance at ₹3,10,000 level,” said Trivedi.

Meanwhile, More expects intraday retracements and profit-taking after the initial jump, so the market may shift from breakout to range-building once the duty impact is fully reflected.

“MCX gold price now holds a moderately bullish bias with support at ₹1,60,000 – ₹1,57,000 and resistance seen around ₹1,65,000 – ₹1,80,000, while MCX silver rate may remain volatile with support at ₹2,92,800 – ₹2,85,260 and resistance at ₹3,00,000 – ₹3,05,600.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.