Finance Minister Nirmala Sitharaman on Friday in her maiden budget speech has made a big announcement that might not be music for the middle-class consumers who buy gold for various reasons. The PM Modi government has increased customs duty on gold and other precious metals to 12.5 per cent from the existing 10 per cent, said Finance Minister in the Parliament.
"It is also proposed to increase customs duty on gold & other precious metals from 10 per cent to 12.5 per cent," announced Nirmala Sitharaman in her Budget speech.
Hours after the announcement, gold prices zoomed Rs 590 to Rs 34,800 per 10 gram in the national capital following the increase in customs duty on the precious metal to 12.5 per cent from 10 per cent.
The PM Modi 2.0 government's move which would make the yellow metal and jewellery expensive in the domestic market, has come as a piece of bad news for middle-class consumers as they buy gold for both consumption and investment purpose. Notably, India is one of the largest importers of gold, as there is a huge demand in jewellery sector.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity surged by Rs 590 each to Rs 34,800 and Rs 34,630 per 10 gram, respectively, according to the All India Sarafa Association.
Gold Price Today:
24 Karat, 10 grams
Gold Price for Today: Rs. 35,615.00
Gold Price for Yesterday: Rs. 35,828.90
22 Karat, 10 grams
Gold Price for Today Rs. 33,300.00
Gold Price for Yesterday Rs. 33,500.00
"The increase of customs duty has led to rising in gold prices and it will have no impact on consumption of gold," said Surendra Jain, Vice President of All India Sarafa Association.
A middle-class family with a single-earner who can hardly afford to invest in properties so opt gold as an investment. In fact, not just as an investment but people in India (all class) also buy gold for traditional events like marriage.
Presently, the gold price for 10g of 24k has almost touched Rs 35,000 in India, an increase in customs duty will make it even costlier for common people.
Reportedly, traders had approached the government demanding a cut on gold's customs duty. However, the government did not pay attention to the demands and went to increase duty on gold and other precious metals.
Since the gold price is on fire, the volume of imports of gold in India has witnessed a dip. With the latest customs duty hike, it is likely to decrease further. Sovereign gold also rose by Rs 200 to Rs 27,000 per eight gram.
Gold Rate in India for last 7 days (PaisaBazaar)Date 24 Karat Gold Rs / 10 gm 22 Karat Gold Rs / 10 gm
05th July 2019 Rs. 35,615.00 Rs. 33,300.00
04th July 2019 Rs. 35,828.90 Rs. 33,500.00
03rd July 2019 Rs. 35,133.70 Rs. 32,850.00
02nd July 2019 Rs. 35,080.20 Rs. 32,800.00
01st July 2019 Rs. 35,508.00 Rs. 33,200.00
30th June 2019 Rs. 35,508.00 Rs. 33,200.00
29th June 2019 Rs. 35,668.50 Rs. 33,350.00
Globally, gold was trading steady at USD 1,413 an ounce in New York, while silver was quoting lower at USD 15.22 an ounce.
In the national capital, silver ready prices declined by Rs 80 to Rs 38,500 per kg, while weekly-based delivery gained Rs 75 to Rs 37,225 per kg.
Prices of silver coins held flat at Rs 80,000 for buying and Rs 81,000 for selling of 100 pieces.