Prices of precious and base metals remain highly volatile amid continued escalation of conflict across West Asia, disrupting global energy flows.
US President Donald Trump has threatened to carry out strikes against Iran in the coming two to three weeks and the dollar index gained as a result. Amid the US-Israel conflict with Iran, the greenback has emerged as the “safe-haven” winner, gaining strength against a basket of six major currencies. This also impacted sentiment in the metal space.
In international markets, spot gold was quoted near the $4,676/oz mark, down nearly 2% on the day, while spot silver was trading near the $73/oz level, 3% lower.
Aluminium prices peak near 4-year high
While most base metals like copper, zinc, and nickel also lost ground over inflationary fears and high energy costs, amidst all of this, aluminium emerged as a winner.
The light metal, used primarily for transportation and construction, touched a nearly four-year record high this week as fears of supply tightness intensified, with Iran attacking two major aluminium producers in the Middle East.
Prices of the light metal used in transport, construction, and packaging touched nearly a four-year peak earlier this week, as Iran’s attacks on two major Middle East aluminium producers intensified fears of a larger supply loss in the Gulf that accounted for roughly 9% of global supply before the war.
On March 30, aluminium futures touched a high of $3,492/mt on the London Metal Exchange, as the metal remained on track for one of its best weekly gains.
So what is the trend in India?
Amid the volatility, the Government of India has tightened norms for the import of gold and other precious metals from ASEAN countries. The cabinet has amended its import policy for many base and precious metals, aimed at checking the misuse of free trade agreements.
As per the revised norms, there are restrictions on imports of all gold, silver, and platinum jewellery. The Directorate General of Foreign Trade (DGFT) said in a notification that a wide range of gems and jewellery have been shifted to the “restricted” import category, which were earlier under the “Free” import category.
These amendments include almost all forms of silver jewellery, and also natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metals, imitation jewellery, and coins. Alongside, various forms of platinum jewellery will also require prior approval.
However, export-oriented units and units operating in Special Economic Zones shall not be subject to these restrictions, provided such imported goods are used for manufacturing goods meant for exports.
“Imports by 100% Export Oriented Units and units located in Special Economic Zones (SEZs) shall not be subject to the above restrictions as per Para 6.01(d) of FTP, 2023 and under Rule 27 of the Special Economic Zones (SEZ) Rules, 2006, respectively, provided such imported goods are not sold into the Domestic Tariff Area (DTAs). Further, imports under the schemes for export of Gems and Jewellery under Chapter-4 of FTP, 2023 shall also be exempt from these restrictions,” read the notification.
MCX Gold, Silver, and Aluminium
Following these cues, the MCX April delivery contract for gold was down by more than 1% on Thursday, last quoted at Rs 1,45,601/10 grams. MCX silver futures for May fell by more than 4% to Rs 2,32,600/kg.
The April delivery contract for aluminium ended flat on MCX at Rs 354/kg.
The commodity exchange is closed today on account of Good Friday.