Quote on Gold Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Below the Quote on Gold Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
MCX gold prices exhibited notable volatility during the budget session, with April gold futures soaring to a record high of Rs. 83,360 per 10 grams ahead of the announcement, amid speculation that government may announce a potential increase in customs duties. However, prices sharply retraced to Rs. 81,639 per 10 grams in a knee-jerk reaction as the government kept the import duty unchanged. The budget included measures for gold, such as a reduction in the customs duty on jewellery and parts from 25% to 20%, effective February 2, as well as a new tariff classification for platinum and gold alloys to promote fair import practices. Both of which are seen as welcome move by the industry.
Despite this pullback, the weakness was short-lived, as prices quickly rebounded to above Rs. 82,400 before closing at Rs. 82,350, demonstrating the resilience of gold prices amidst market fluctuations. Gold has been benefiting from a surge in safe-haven demand in recent months, primarily driven by global geopolitical tensions and concerns over trade wars. U.S. President Trump’s tariff threats have heightened fears of potential retaliatory trade wars, further bolstering gold’s appeal as a secure investment. A similar pattern of volatility was observed in silver, with March futures rising to Rs. 94,400 per kg before retreating to Rs. 92,535 and eventually closing above Rs. 93,200
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