Gold Prices in India Slip to one-year Lows and then Jump Sharply

Gold Prices in India: The premium gold dealers charged over official prices in India edged lower amid an uptick in prices. Dealers charged premiums of up to $4 an ounce this week over official domestic prices, down from the last week’s $5, Reuters reported.

Gold rates in India include 10.75% import and 3% GST. Gold futures on MCX settled at ₹45404 per 10 gram on Thursday. Trading on MCX will be closed today due to a public holiday. On the other hand, silver futures settled at 65,040 per kg. For the week, gold ended higher by ₹300.

Earlier this week, gold fell ₹44,100, its lowest level since April 2020. Gold wholesalers expect physical retail demand in India to improve of prices remain subdued. But they say more restrictions in wake rising coronavirus cases could dampen demand.

Gold prices in India are still down ₹11,000 from August highs of ₹56,200.

Correction in gold prices and reduction in import duty has resulted in a big jump in imports into India, Reuters reported, citing sources. In March, India’s gold imports surged 471% from a year earlier to a record 160 tonnes, the report said.

In Budget 2021, which was tabled in February, the government slashed import duties on gold to 10.75% tax from 12.5% to boost retail demand and curtail smuggling.

In global markets, gold was trading at $1,729.40 an ounce. On Thursday, gold rose over 1% buoyed by a retreat in the dollar and U.S. bond yields. In August last year, gold had hit a record high of $2,072 in international markets.

“In international markets, gold has bounced from the lows of $1682-$1675 levels. On the upside, $1720-$1725 could prove to be resistance for the prices,” said Kshitij Purohit, Lead – International & Commodity at CapitalVia Investment Advisor.

“On the domestic front, MCX Gold June has been sustaining above 20-SMA. Prices have already rallied more than ₹800 from the support of 44000-44200 levels,” he added, saying prices may consolidate in near term after the sharp rise.

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