Gold Prices Surge in India Amid Import Duty Speculation
By [Author Names]
January 23 – Gold premiums in India have soared this week, reaching their highest levels in over ten years. This increase comes as investors are eager to purchase gold ahead of anticipated hikes in import duties in the upcoming budget. Meanwhile, premiums in China have decreased as global gold prices inch closer to a historic $5,000 per ounce.
Bullion dealers in India are now charging premiums of up to $112 per ounce on top of official gold prices, including an import duty of 6% and a 3% sales tax—the highest since May 2014. Just last week, dealers were offering discounts of up to $12.
“The demand has been incredibly strong this week and is outpacing supply. With an expected rise in duties, investors jumped in aggressively,” said Chanda Venkatesh, managing director of CapsGold, a bullion merchant based in Hyderabad.
Indian Finance Minister Nirmala Sitharaman is set to unveil the union budget for 2026/27 on February 1. In July 2024, she reduced import duties on gold and silver from 15% to 6%.
While jewelry demand appears to be weak, investment buying has been impacted by high prices. However, the anticipation of increased duties has made gold more appealing to buyers, noted a bullion dealer in Mumbai.
Domestic gold prices reached a new high of 159,226 rupees for 10 grams on Friday.
In China, gold was trading at premiums of up to $8 per ounce above the global benchmark, a notable shift from last week’s discount of $12. Though physical demand in China is somewhat low, experts see this as a sign of a healthy market as both retail and affluent investors are still keen on acquiring physical gold, albeit in smaller quantities.
According to Peter Fung, head of dealing at Wing Fung Precious Metals, people are opting for gold bars and coins since premiums are higher on jewelry.
In Singapore, gold prices varied, with discounts of $0.50 to premiums of $2 per ounce. In Hong Kong, gold traded at a premium of $1.70, while in Japan, it was at discounts of $6 to a $1 premium, similar to last week.
International spot gold prices climbed to another record high on Friday, driven by ongoing geopolitical tensions and economic uncertainties.
(Reporting by [Author Names]; Editing by [Editor’s Name])
