Gold prices today rise to highest level in 2 months

Gold prices today extended gains in India, with the yellow metal rising to 2-month highs. On MCX, gold futures were up 0.4% to ₹52,117 per 10 gram. On Friday, gold prices in India had surged nearly 3% or ₹1,500 per 10 gram after government in a sudden move hiked import duty on the precious metal. The government raised basic import duty on gold to 12.5% from 7.5% to dampen demand and bring down the trade deficit. India imports most of its gold requirement. 

In contrast, in global markets, the precious metal today slipped 0.2% at $1,807.19 per ounce, hurt by a firm US dollar, which hovered near two-decade high against a basket of other major currencies. A stronger greenback makes gold less attractive for buyers holding other currencies. However, gold was supported by a pullback in US bond yields which fell to their lowest level in a month on Friday.

Gold prices today jumped to ₹52,117 per 10 gram on MCX

The Indian government has raised basic import duty on gold to 12.5% from 7.5% to bring down the trade deficit ETF flows remained weak. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.8% to 1,041.9 tonnes on Friday from 1,050.31 tonnes on Thursday.On global gold prices, Pritam Patnaik, Head - Commodities, HNI and NRI Acquisitions, Axis Securities, said: “Clearly, a robust Dollar index and buoyant treasury yields have inhibited any bullish sentiments. Expect gold prices to remain under pressure for some time now. If $1800 is again breached, a move towards $1780 -$1760 cannot be ruled out . Bulls will only return if $1845 levels are taken out on the upside."Apart from global gold rates  and import duties, domestic gold prices track rupee dollar performance.

Among other precious metals, spot silver eased 0.2% to $19.82 per ounce, while platinum fell 0.5% to $884.39. Back in India, jewellers have urged the government reconsider the gold import duty hike. Ahammed MP, Chairman, Malabar Gold & Diamonds, said: 

“The government decision to increase the import duty on gold to 15 percent including the agriculture infrastructure development cess (AIDC) of 2.5 percent will have a major impact on the jewellery trade. The increase in import duty is likely to give a rise to gold smuggling to a large extent for evading tax. As a result, the government stands to lose a huge amount of revenue from tax collection. We urge the government to review the import duty increase on gold."

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