Gold up Rs40 on duty hike, global cues

Gold prices rose today rose by Rs40 to Rs31,290 per 10 grams here, after increase in import duty on the precious metal amid a firming global trend.

However, silver lacked necessary follow up support and surrendered Rs300 to Rs59,300 per kg.

The trading sentiment improved after the government yesterday hiked import duty on gold and platinum to six per cent from 4% earlier - a move aimed at curbing imports of the precious metals to check the widening current account deficit.

Traders said the gold prices had a steep rise of Rs315 in late evening trade soon after the government's decision to hike in import duty.

They said the decision came close on the heal of rising demand for the precious metals for the wedding season and firming trend in overseas markets.

"The market is in a bullish mood for the rising seasonal demand and firming global trend and impact of the government decision will take some time," All India Sarafa Bazar Association Vice-President Surender Jain said.

In Singapore, gold increased by 0.2% to $1,693.30 an ounce.

In the national capital, gold of 99.9 and 99.5% purity advanced by Rs40 each to Rs31,290 and Rs31,090 per 10 grams, respectively. Sovereigns followed suit and rose by Rs50 to Rs25,450 per piece of eight grams.

On the other hand, silver ready fell by Rs300 to Rs59,300 per kg and weekly-based delivery by Rs250 to Rs59,350 per kg. Silver coins too dropped by Rs1,000 to Rs82,000 for buying and Rs83,000 for selling of 100 pieces.