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Wednesday, March 29, 2023

India Bullion: MCX gold hits new high, silver surges 1% post Budget

Informist, Tuesday, Jan 31, 2023


By Sayantan Sarkar


MUMBAI – GOLD contracts on the Multi Commodity Exchange of India rose to a lifetime high today as the government kept import duty on the yellow metal unchanged. 


* The basic custom duty on gold, along with the agricultural infrastructure and development cess, stands at 15%. Even though the total duty on imports of gold remains unchanged, the government did reduce the basic customs duty on imports of the yellow metal to 10% from 12.5% earlier. However, the agriculture cess was hiked to 5% from 2.5%.


* The most-active April gold contract on MCX hit a record high of 57,950 rupees per 10 gm. 


* “Markets were expecting a cut in gold import duty in order to support domestic gems and jewellery industry but fears of a wider CAD (current account deficit) as indicated in economic survey likely prompted the authorities to stay put,” said Ravindra V. Rao, head of commodity research at Kotak Securities. 


SILVER contracts on MCX surged more than 1% after the government raised the basic custom duty and agriculture infrastructure cess in the Union Budget for 2023-24 (Apr-Mar), which was presented by Finance Minister Nirmala Sitharaman earlier today. This was done to align the duty structure of silver with gold. 


* The basic customs duty on silver was raised to 10% from 7.5% and the Agriculture Infrastructure and Development Cess on imports to 5% from 2.5% earlier. Customs duty for silver dore was hiked to 10% from 6.1% and the agriculture infrastructure cess to 4.35% from 2.5%. 


* Additionally, the Budget also announced that the conversion of physical gold to electronic gold receipts and vice-versa will not attract any capital gains. 


* On COMEX, gold prices were flat ahead of the outcome of the two-day policy meeting of the US Federal Reserve later today. The market expects the US Fed to slow its pace of interest-rate hikes, which is likely to be bullish for prices. 


* At 1703 IST, the most-active contracts of bullion were:

  –April gold was up 1.3% at 57,917 rupees per 10 gm on MCX

  –April gold was flat at $1,945.30 an ounce on COMEX

  –March silver was up 1.6% at 69,930 rupees per kg on MCX

  –-March silver was down 0.8% at $23.63 an ounce on COMEX


* Outlook for the evening session:

  –MCX gold seen at 56,726–58,030 rupees per 10 gm

  –COMEX gold seen at $1,910–$1,971 an ounce

  –MCX silver seen at 68,078-70,632 rupees per kg

  –COMEX silver seen at $23.25-$24.85 an ounce




US$1 = 81.92 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Maheswaran Parameswaran


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Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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