Gold prices in India today rose by Rs450 to Rs28,140 per 10 grams as stockists created fresh positions to meet seasonal demand. The trend was further triggered by the proposals to hike import duty on gold and jewellery in the budget presented today.
Silver followed suit and jumped up by Rs300 to Rs56,500 per kg although import duties have not been hiked, as industrial units purchased more on fears of price rise in the coming days.
The same budgetary proposal that led to a rise in India saw a further fall in international gold prices, after India, the world's biggest consumer of gold, said it would double import duties and upbeat US data this week fed optimism over the global economy, boosting risk appetite.
The bullion market relies heavily on Indian jewellery demand. Last year, the country imported a record 969 tons of the precious metal and in January, raised the import duty by 90 per cent.
Traders reportedly said the bullion market is shocked on the budgetary proposals to hike import duty for the second time this year on standard gold bars and coins and unbranded ornaments.
The government will tax gold bars and coins and platinum at 4 per cent, finance minister Pranab Mukherjee said in his budget speech in Parliament. The government had set 2 per cent duty on 17 January. There was no change in the tax on silver.