New Delhi: Finance Minister Nirmala Sitharaman announced a significant reduction in customs duties on gold and silver during her Budget presentation on Tuesday.

This cut has resulted in a notable drop in prices, benefiting consumers and increasing market demand. Nonetheless, future trends may still be influenced by broader market conditions and geopolitical factors.

The import duty on gold and silver has been reduced from 15% to 6%. This includes a decrease in the Basic Customs Duty (BCD) from 10% to 5%, and a reduction in the Agricultural Infrastructure Development Cess (AIDC) from 5% to 1%.

“Cutting import duty on Gold will moderate the rise in gold prices lately and make gold a bit unattractive as an investment avenue at least temporarily,” Dhiraj Relli, MD & CEO, HDFC Securities.

Gem & Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah said that Union Budget 2024 is a game-changer for the gems and jewellery sector.

“The reduction in import duties on gold and silver to 6% and platinum to 6.4% is a major boost for our industry, enhancing affordability for consumers and competitiveness for the manufacturing sector by releasing working capital,” he stated.

As a result of the announcement, gold prices on the Multi Commodity Exchange (MCX) fell to Rs 68,500 per 10 grams, down from Rs 72,838, a decrease of Rs 4,000. Internationally, gold prices hovered around $2,397.13 per ounce, showing a similar trend.

Silver prices on the MCX also dropped significantly, falling to Rs 84,275 per kg from Rs 88,995.