Gold prices tumble during the week, silver sees a mixed trend

Union finance minister Nirmala Sitharaman on Monday announced a cut in customs duty on gold and silver to 7.5% from 12.5%.

Gold prices continued to see a bad run throughout the week as the government announced cut in import duty on the yellow metal as well as silver. Union finance minister Nirmala Sitharaman on Monday announced a cut in customs duty on gold and silver to 7.5% from 12.5%, in a move which will help lower the prices of the precious metals in the domestic market and boost exports of gems and jewellery.

Citizens take precautions as they buy gold on the occasion of Dhanteras on Friday. (Satish Bate/HT Photo)

"Gold and silver presently attract a basic customs duty of 12.5 per cent. Since the duty was raised from 10 per cent in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising customs duty on gold and silver," Sitharaman had said while presenting the Union Budget 2021-22 on Monday.

On Monday, gold tumbled ₹1,324 to ₹47,520 per 10 gram in Delhi. In the previous trade, the precious metal had closed at ₹48,844 per 10 gram. However, silver jumped ₹3,461 to ₹72,470 per kilogram from ₹69,009 per kilogram in the previous trade.

Gold was trading in the green at $1,871 per ounce in the international market and silver also quoted with gains at $29.88 per ounce.

"Budget announcement related to cut in import duty cut from 12.5 per cent to 7.5 per cent hammered gold lower. This step has been implemented amidst the recent rise in prices, smuggling and other factors,” Navneet Damani, vice president of commodities research, at Motilal Oswal Financial Services, was quoted as saying by news agency PTI.

Gold declined by ₹480 to ₹47,702 per 10 gram on Tuesday in the national capital in-line with fall in global precious metal prices, according to HDFC Securities. In the previous trade, the metal had closed at ₹48,182 per 10 gram.

Silver also tumbled ₹3,097 to ₹70,122 per kilogram from ₹73,219 per kilogram in the previous trade. In the international market, gold traded lower at $1,847 per ounce and silver also dipped to $27.50 per ounce.

"Gold prices declined on lack of progress over the US stimulus package and in absence of fresh triggers. Traders and investors also rushed to book some profits," Tapan Patel, a senior analyst (commodities) at HDFC Securities, said according to PTI.

Damani of Motilal Oswal said investors are witnessing some profit-booking from the highs, after the duty cut announcement in the Union Budget.

Gold in the national capital on Wednesday again declined by ₹232 to ₹47,387 per 10 gram amid the decline in global precious metal prices, PTI reported citing acHDFC Securities. In the previous trade, the precious metal had closed at ₹47,619 per 10 gram.

Silver also dipped ₹1,955 to ₹67,605 per kilogram from ₹69,560 per kilogram in the previous trade. In the international market, gold was quoting lower at $1,835 per ounce and silver was flat at $26.78 per ounce.

HDFC Securities' Patel, according to PTI, said gold prices are trading under pressure on stronger dollar and rally in equity indices.

On Thursday, gold recorded a fall for the fourth consecutive day and declined ₹322 to ₹47,135 per 10 gram in line with a drop in global precious metal prices and rupee appreciation, HDFC Securities said according to PTI. It had closed at ₹47,457 per 10 gram in the previous trade. Silver also declined ₹972 to ₹67,170 per kg, from ₹68,142 per kg in the previous trade.

"Spot gold prices for 24 karat in Delhi were down by ₹322 reporting fourth consecutive fall with decline in global gold prices and rupee appreciation," Patel was quoted as saying by PTI.

The rupee appreciated by 6 paise to 72.90 against the US dollar in opening trade on Thursday. In the international market, gold was trading lower at $1,825 per ounce and silver was flat at $26.61 per ounce.

Gold fell again on Friday as it declined ₹163 to ₹46,738 per 10 gram in the national capital amid rupee appreciation, PTI cited HDFC Securities. Gold had closed at ₹46,901 per 10 gram in the previous trade. On the other hand, silver gained ₹530 to ₹67,483 per kg, from ₹66,953 per kg in the previous trade.

The rupee was up by 3 paise to 72.93 against the dollar in the opening trade on Friday. Gold was quoting with gains at $1,810 per ounce and silver was flat at $26.71 per ounce in the international market.

(With PTI inputs)