Gold prices in India hit their all-time high after the Finance Minister Nirmala Sitharaman announced an increase in customs duty on gold to 12.5 per cent from 10 per cent while presenting Union Budget for 2019-20 in the Lok Sabha. The gold prices on MCX touched lifetime high of Rs.35,100 per ten grams against Rs 35,074 per ten grams in August 2013. “The gold prices hit their all-time high on Tuesday mainly on account of the rise in customs duty on gold. The other reasons for the surge in gold prices could be dollar weakness, expectations of a rate cut in the US, and ETF buying,” Ajay Kedia, Director, Kedia Commodity told Financial Express Online.
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“Gold is at an all-time high of Rs 35,100 per ten gram after the Finance Minister announced rise in customs duty to 12.5 per cent from 10 per cent. Gold is gearing up for further upside towards Rs 36,200 per ten gram,” Navneet Damani, Vice President, Commodity & Currency Research, Motilal Oswal Financial Services.
With the rise in customs duty on gold, prices will rally in the short term. However, ahead of festival seasons, an all-time high gold will taste sour to buyers. Hence, overall demand may fall going ahead. Moreover, today the market will keenly wait for US employment report. So, we expect prices to be volatile with a positive bias, Jigar Trivedi, Fundamental Analyst- Commodities, Anand Rathi Shares & Stock Brokers told Financial Express Online.
The government today in its Union Budget 2019-20 announced an increase in customs duty on the yellow as against the industry expectation which had demanded a significant cut in the custom duty as the gold The industry had demanded a cut in import duty to the tune of 4 per cent in a bid to boost demand for the precious yellow metal.