The gold and silver markets in India surged on May 14 following a spate of high import duties imposed by the government on precious metals, due to the current economic pressure stemming from the ongoing crisis in West Asia. The move has been made to reduce non-essential imports and save the foreign currency reserves of the country amid the ongoing tension between the United States and Iran.
The government has hiked import duty on gold and silver gold from 6% to 15% and import duty on platinum has been raised to 15.4%. The amended responsibilities took effect on Wednesday itself, sending the bullion markets on a strong rally, including the Multi Commodity Exchange (MCX).
Intraday gold futures on MCX jumped up to 7.2% to trade at ₹1,64,497 per 10 gram. Silver futures too spiked up by 7.9% to briefly cross ₹3 lakh per kg before subsiding a bit later in the session.
This sudden surge in prices have caused an ambivalent situation for jewellery buyers and investors especially during this wedding season when there is generally high demand in the market.
Gold Prices Today Across Major Cities
On May 14, gold prices continued to move around in retail markets in various cities in India. Mumbai and Kolkata had similar rates and Chenni were found to be the most expensive of all the major metros.
Gold Rate Today – Purity Wise
| Gold Purity | Price per 10 Grams: |
|---|---|
| 24 Carat | ₹1,62,010 |
| 22 Carat | ₹1,48,510 |
| 18 Carat | ₹1,21,510 |
City-Wise Gold Rates Today
| City | 24K Gold | 22K Gold | 18K Gold |
|---|---|---|---|
| Delhi | ₹16,216 | ₹14,866 | ₹12,166 |
| Mumbai | ₹16,201 | ₹14,851 | ₹12,151 |
| Chennai | ₹16,368 | ₹15,001 | ₹12,561 |
| Kolkata | ₹16,201 | ₹14,851 | ₹12,151 |
| Bengaluru | ₹16,201 | ₹14,851 | ₹12,151 |
| Hyderabad | ₹16,201 | ₹14,851 | ₹12,151 |
| Ahmedabad | ₹16,206 | ₹14,856 | ₹12,156 |
| Pune | ₹16,201 | ₹14,851 | ₹12,151 |
Many global and local factors are driving domestic bullion prices up. The current geopolitical tensions between the US and Iran, along with a less strong Dollar Index and increased uncertainty in the global markets, are likely driving investors to keep their money in safe-haven assets such as gold and silver, according to analysts.
Silver Prices Witness Massive Rally
The price of silver also had a big jump following the import duty hike announcement. Silver is topping ₹3 lakh per kilogram mark in several cities.
Silver Rate Today
| City | 10 Gram | 100 Gram | 1 Kg |
|---|---|---|---|
| Delhi | ₹3,101 | ₹31,010 | ₹3,10,100 |
| Mumbai | ₹3,101 | ₹31,010 | ₹3,10,100 |
| Chennai | ₹3,201 | ₹32,010 | ₹3,20,100 |
| Kolkata | ₹3,301 | ₹33,010 | ₹3,30,100 |
| Hyderabad | ₹3,201 | ₹32,010 | ₹3,20,100 |
| Bengaluru | ₹3,101 | ₹31,010 | ₹3,10,100 |
Silver was trading at ₹3,01,429 per kg on the intraday high of MCX futures, settling by a slight margin. Besides investment buying, market experts think industrial demand is another major driver of silver prices and thereby making it very volatile.
Why Government Increased Import Duty?
The sharp increase in import duty comes after the Prime Minister Narendra Modi had made a call to the public for less of importation of non-essential items, including gold, to save foreign reserves.
Also Read: PM Modi Urges Indians to Refrain from Gold Purchases for a Year
India is a major importer of gold with bullion being one of the biggest non-essential import costs. Pressure on the trade balance of India has already increased due to the rise in oil prices, disruptions in the Strait of Hormuz and geopolitical instability.
According to economists the government is aiming to make the decision to:
- Cutting overproduction of bullion imports
- Controlling pressure on forex reserves
- Limiting non-essential spending
- The stabilisation of the import bill in the global crisis
What experts are saying?
Bullion analysts say gold may be volatile over the next few weeks, as markets continue to respond to geopolitical events and currency fluctuations.
Also Read: PM Modi Reduces Official Convoy Size by 50% Amid West Asia Crisis
In the short term higher import taxes could dampen retail demand but caution on global borders and a “safe haven” buying trend could keep prices high. The US Federal Reserve’s policy stance and the price of crude oil are also being closely watched by investors, as are the Middle East conflict developments.
The sharp increase could lead to higher costs for jewellery buyers during the wedding season, and may be encouraging investors to be careful as the world evolves rapidly.
