Gold and silver prices fell sharply on Tuesday after Finance Minister Nirmala Sitharaman announced a cut in customs duties on gold and silver to 6 percent. The tax on platinum was also reduced to 6.4 percent. Prices fall more than five percent in one day, which was the biggest drop since June 2021.
Gold was near a four-month low after Finance Minister Nirmala Sitharaman announced a rate cut to 6 percent. The budget for the next fiscal year of the Union included a reduction in customs duties to increase the domestic value addition of gold and precious metal jewellery.
The general tax on gold and silver has been reduced from 15% to 11%, which includes a 5% tax on agricultural infrastructure. of.
Additionally, the government announced a cut in customs duties on platinum to 6.4%. To reduce the cost of steel and copper production, the government reduced the basic customs duty (BCD) on ferro nickel and blister copper. The government will continue with nil BCD on ferrous scrap and nickel cathode and a concessional BCD of 2.5% on copper scrap.
A reduction in gold customs duties will result in a decline in domestic prices, which is expected to boost demand. However, higher demand for gold could ramp up prices globally, potentially widening the country’s trade deficit and weakening the rupee.
Technical Outlook – (Gold Futures)
The price of gold fell yesterday to an April 2024 low of 68456. Prices fell 5.79%, their biggest one-day drop since June 2021, to 68,510 from 72,718 the previous day.
A black open marubozu candlestick on the chart indicates a bearish trend in the near future. However, it needs to break below the next support at 67050 to test the next support at 66300-65900.00 Otherwise, prices may stabilize between 67100-69000 for a short- time.
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Commodity Samachar
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