Base prices for all commodities are in dollar per tonne, except for gold and silver. The gold tariff is in dollar per 10 grams. The base tariff value on gold has been cut to $549 per 10 grams, from $557 per 10 grams earlier.
Gold is an international commodity, and it is priced in US dollars. So, the price movement of the yellow metal in India is closely linked to the greenback and import duties.
In July, the government had raised its basic import duty on gold to 12.5% from 7.5%, leading to a sharp jump in domestic prices vs global rates. India meets most of its gold demand through imports.
In India, gold prices in India remained near 6-month lows as MCX futures fell 0.16% to ₹49,231 per 10 gram. Gold is down about ₹1,500 so far this week, from Monday's highs.
In global markets, the yellow metal struggled near two-year lows amid elevated US dollar and prospects of aggressive US rate hikes. Spot gold was t $1,664.48 per ounce and has fallen 3% so far this week.
“In fast approaching festival season, demand for gold and edible oil is expected to go northward. Due to rise in demand of the precious metal and edible oil, India will have to import these commodities more in comparison to normal days. Hence, government of India's move to cut base import price of gold and some edible oils is aimed at providing relief to the domestic consumers of these commodities. This move is important because nations from where we import edible oil might increase their export price due to demand-supply constraint emerging after the soaring import orders from India," said Anuj Gupta, Vice President — Research at IIFL Securities.
