Gold surges on import duty concerns

The gold prices surged by Rs 100 to close at Rs 14,750 per ten gram in the bullion market on Monday influenced by budgetory proposals to hike import duty on gold bars even as the metal in overseas market quoted lower.

Presenting the Union Budget 2009-10, Finance Minister Pranab Mukherjee announced increasing import duty on gold bars from Rs 100 per 10 gram to Rs 200 per 10 gram, while other forms of gold (excluding jewellery) is increased from Rs 250 per 10 gram to Rs 500 per 10 gram.

The customs duty on silver has also been increased from Rs 500 per kg to Rs 1,000 per kg. The duty on gold and silver has not been reviewed since 2004 even though prices have increased manifold, the finance minister said.

The upsurge was partly checked following a steep fall in gold prices in other Asian markets, which normally set price trend in domestic markets here. The gold in overseas markets traded $9.50 lower at $922.30 an ounce.

A similar firmness was noticed in silver as the metal in spot trading gained Rs 50 at Rs 21,800 per kg and weekly-based delivery by Rs 80 at Rs 21,680 per kg. Silver coins rose by Rs 100 atRs 28,900 for buying and Rs 29,000 for selling of 100 pieces.

Standard gold and ornaments rose by Rs 100 each at Rs 14,750 and Rs 14,600 per ten gram respectively. Sovereign held unchanged at Rs 12,300 per piece of eight gram in limited deals.