Gold demand jumps on fears of higher import duty

MUMBAI Wed Feb 27, 2013 4:28pm IST

Salespeople are reflected in a mirror as they stand at the cash counter inside a gold jewellery showroom in Kochi February 25, 2013. REUTERS/Sivaram V/Files

Salespeople are reflected in a mirror as they stand at the cash counter inside a gold jewellery showroom in Kochi February 25, 2013.

Credit: Reuters/Sivaram V/Files

Related Topics

MUMBAI (Reuters) - Gold demand in India, the world's biggest consumer of the metal, jumped on Wednesday as buyers preponed purchases on concerns the government may raise the import duty on Thursday to control a record current account deficit.

The government has already targeted gold, second only to oil in value of imports, by raising the duty to 6 percent from 4 percent on January 21. A government report on Wednesday recommended reining in gold imports to curb external deficit.

"Jewellers and traders are a bit worried about the government policy. They are buying on expectations of some moves to curb gold imports in the budget. There might be a higher duty or quantities restriction on imports," said a Mumbai-based dealer with a state-run bullion importing bank.

Trade Minister Anand Sharma said last week that he was discussing further curbs on gold imports with Finance Minister P. Chidambaram, who will present what is expected to be an austere budget for 2013/14 on Thursday.

As of 4.25 GMT, the benchmark April contract on the Multi Commodity Exchange (MCX) was 0.65 percent lower at 29,896 rupees per 10 gram on a strong rupee. The contract had hit a seven-month low of 29,263 rupees last week.

The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, rose on Wednesday.

Globally, gold edged lower, but held near a 1-1/2-week high hit in the previous session as the U.S. Federal Reserve reassured investors of its commitment to loose monetary policy, burnishing bullion's appeal as a hedge against inflation.

The silver contract for March delivery on the MCX was 0.94 percent lower at 54,067 rupees per kg.

(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage