Gold prices in India In Focus: In major news, the Finance Ministry has trimmed the import tariff on gold per 10 grams and silver per 1kg. The changes have come into effect from March 1. As per the ministry data, import tariffs were cut by $11 on gold per 10 grams to $927. While silver per 1 kg saw a reduction of $18 to $1,025. Gold import duty and taxation play a key role in determining the prices of gold. A cut in duty generally drives demand for precious metals higher. The start of March month for gold has been volatile after rising by 3% overall in February month.
Gold Import Tariff:
As per the statement of FinMin, the new tariff value is set at $927 per 10 grams on the following gold:
- gold, in any form, in respect of which the benefit of entries at serial number
- gold bars, other than tola bars, bearing manufacturer's or refiner's engraved serial number and weight expressed in metric units;
- gold coins having gold content not below 99.5% and gold findings, other than imports of such goods through post, courier or baggage.
Notably, for this entry, "gold findings" means a small component such as a hook, clasp, clamp, pin, catch, or screw back used to hold the whole or a part of a piece of Jewellery in place.
While the new tariff value on silver is set at $1,025 per 1Kg on following:
- Medallions and silver coins having silver content not below 99.9% or semi-manufactured forms of silver falling under sub-heading 7106 92, other than imports of such goods through post, courier or baggage
- Silver, in any form, other than medallions and silver coins having silver content not below 99.9% or semi-manufactured forms of silver falling under sub-heading 7106 92;
For this entry, silver in any form shall not include foreign currency coins, jewellery made of silver or articles made of silver.
This comes after gold imports declined sharply in January 2025, due to high prices leading the pullback in demand. Notably, January's import is the lowest since July last year.
Ministry of Commerce data showed that the gold import bill in January 2025, stood at $2.68 billion, registering a decline of 43% compared to the previous month.
A report of the World Gold Council also highlighted that one of the key takeaways from the Union budget presented on 1 February for gold is that the import duty hasn't been changed. On the other hand, the government cut the customs tariff on gold jewellery from 25% to 20%. This is likely done as part of the overall rationalisation of tariffs across commodities.
Further, the World Gold Council added that the rally in gold prices to repeated new all-time highs since the start of the year has weighed heavily on the retail demand for gold jewellery. Uncertainty about announcements in the Union Budget also influenced buying activity.
This slowdown in jewellery demand has left retailers reluctant to restock, as they face challenges in meeting payment terms with manufacturers. This has created a liquidity crunch within the industry, it said.
Gold Prices, Silver Prices:
Gold prices in India surged by 3% in February 2025, with its new all-time high at Rs 88,090 per 10 grams which was touched on February 25. Gold extended record rally performance last month. While in January 2025, gold prices climbed overall by 8.11%.
In the case of silver, however, 1kg of this precious metal has declined by 2.5% in February, after outperforming gold in January 2025 with gains of nearly 10%.
On March 3, the 24K gold price is at Rs 86,620 per 10 grams, while 22K and 18K prices are at Rs 79,400 and Rs 64,970 per 10 grams. 1kg silver price is at Rs 97,000.
On MCX, gold futures with April 2025 expiry, surged by a whopping Rs 1,132 or 1.34% to close at Rs 85,351 per 10 grams. Meanwhile, silver futures with May 2025 expiry stood at Rs 96,240 per 1kg, higher by Rs 1,912 or 2.03%.
The MCX gold and silver prices tracked a sharp upside in international prices after President Donald Trump's tariff policies pushed investors to restore haven assets. Spot Gold traded above $2,890 an ounce, higher by 1.2%.
As per Trading Economics, Trump's proposed tariffs on Mexican and Canadian goods, set to take effect on March 4, alongside an additional 10% duty on Chinese goods, have fueled concerns over potential retaliatory measures and broader trade tensions. The inflationary impact of these actions also supports gold, which is often seen as a hedge against rising prices. Adding to its appeal, the U.S. dollar retreated from a two-week high, making the metal less expensive for other currency holders. Moreover, the resurgence of fears about the health of the U.S. economy has boosted market expectations for Federal Reserve interest rate cuts, increasing bullion's allure as a non-yielding asset.
In February, the World Gold Council report said, looking ahead, gold investment interest is expected to remain strong, even as jewellery demand faces pressure from record-high prices. The financial year-end dynamics, which include statutory payments and tax-saving investments, may curtail discretionary spending, further weighing down demand. However, price stability could be a mitigating factor for jewellery demand, which could see an improvement in the new fiscal year starting in April.
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