Gold jumps Rs 1,088 amid 5 per cent import duty hike

New Delhi: Gold in the national capital on Friday rose by Rs 1,088 to Rs 51,458 per 10 grams, according to HDFC securities.

In the previous trade, the precious metal finished at Rs 50,370 per 10 grams.

Silver, however, fell by Rs 411 to Rs 58,159 per kg from Rs 58,570 per kg in the previous trade.

"Spot gold prices for 24-carat gold in Delhi surged by Rs 1,088 after India raised import duty on gold by 5 per cent," said Tapan Patel, Senior Analyst (Commodities) at HDFC Securities.

In the international market, gold was quoting lower at USD 1,794 per ounce and silver was flat at USD 19.76 per ounce.

The government has hiked gold import duty to 15 per cent from 10.75 per cent to check current account deficit (CAD) and rising import of the yellow metal.

The duty changes came into effect from June 30.

Earlier, the basic customs duty on gold was 7.5 per cent, now it will be 12.5 per cent. Along with agriculture infrastructure development cess (AIDC) of 2.5 per cent, the effective gold customs duty will be 15 per cent.

There has been a sudden surge in imports of gold. In the month of May, a total of 107 tonnes of gold was imported and in June also the imports have been significant. The surge in gold imports is putting pressure on the current account deficit, the finance ministry said.