India's most-traded August gold contract extended its gains to as much as 2.2 percent on Thursday after the federal government kept gold import duty unchanged at a record 10% in the budget.
Gold for August delivery on the Multi Commodity Exchange rose to as much as 28,225 rupees, up 2.2%. The contract traded at 28,040 rupees at 0751 GMT.
Industry officials were expecting a reduction in import duty to arrest a rise in smuggling of the precious metal since last year.
India, desperate to trim a gaping current account deficit, took a slew of measures last year to curb demand for bullion, its second-biggest import after oil.