MCX Gold Rate Today Jumps Over 7% After Government Doubles Import Duty; Silver Prices Rally Sharply

Gold and silver prices had a massive rally on the Multi-Commodity Exchange (MCX) on Wednesday morning after the Centre announced a sharp hike in import duty on precious metals.

Post the announcement, strong buying activity was seen in the bullion market, pushing the MCX gold rate and the MCX silver rate significantly higher during early trade.

At around 10 am on Wednesday, the MCX gold rate today for the 5th June futures contract surged nearly 6% or Rs. 9,260 to trade at Rs. 1,62,727 per 10 grams. Meanwhile, the MCX silver July futures skyrocketed 6.56% or Rs. 18,314 to Rs. 2,97,376 per kg.

The sharp jump in bullion prices comes after the government doubled the import duty on gold, silver and platinum from 5% to 10%. The revised customs duty came into effect from midnight on May 13 after the notification issued by the Department of Revenue under the Customs Act.

Why Are Gold and Silver Prices Rising Today?

The sudden increase in MCX gold price today and silver rates is largely linked to the government's decision to make imports of precious metals more expensive. The decision could push domestic prices higher in the coming days as import costs rise sharply for traders and jewellers.

The duty hike applies not only to gold, silver and platinum imports, but also to jewellery findings and precious metal-related industrial imports. This broader increase is expected to impact the jewellery industry as well as retail buyers across India.
the announcement immediately sparked bullish sentiment in the bullion market, resulting in a sharp rally in MCX gold futures and MCX silver futures.

PM Narendra Modi's Appeal Ahead Of Duty Hike

Interestingly, the government's move came just two days after Prime Minister Narendra Modi urged citizens to postpone gold purchases amid rising pressure on India's foreign exchange reserves.

The Prime Minister talked about concerns over the ongoing Middle East conflict and its impact on global crude oil prices and the Indian economy. With rising geopolitical tensions increasing pressure on imports and forex reserves, the government appears to be taking measures to curb non-essential imports like gold.

Impact On Gold Buyers And Jewellery Market

The import duty hike is likely to make gold jewellery, silver articles and platinum products more expensive in India. Jewellers may soon pass on the additional import cost to consumers, potentially leading to higher retail prices during the upcoming festive and wedding season.

Global Gold And Silver Prices Also Rally

International bullion prices also added strong gains amid the sharp surge in precious metals. On the COMEX, gold prices were tarding 0.4% higher at $4,698.22 per ounce during the session. The white metal also touched a session high of $88.58 per ounce as per data from Spotgold.org.