Hyderabad: The gold rates that are already hitting new highs may continue to rise in Hyderabad and other cities in India as the government increased customs duty and kept import duty unchanged.
Gold traders who were expecting a reduction in import duty in the union budget are left disheartened as no change was introduced. The import duty continues to remain at 15 percent.
Rather the government increased custom duties on articles of gold, silver, and platinum thereby making precious metal jewelry costly.
At present, the rates of 24-carat and 22-carat gold in Hyderabad are Rs 57550 and Rs 52750 per 10 grams. It is likely to rise further in the upcoming days.
As per market experts, the rates in India are likely to touch Rs 60000 per 10 grams.
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Reasons for rise in gold rates in Hyderabad, other cities
One of the major reasons for the rise in gold rates is the threat of recession which is being predicted by many experts ever since Russia invaded Ukraine in February 2022.
However, the sudden spike in gold rates across the world can be attributed to the anticipated US Fed rate hike of 25 basis points (bps) which is less than the 50 bps that was hiked in December.
The slowing down in tightening pace by US Fed will make interest-bearing assets less preferable investment option. It pushes investors to prefer gold.
Due to these global reasons, the gold rates in Hyderabad and other Indian cities are witnessing hikes. The surge in rates resulted in a 25 percent drop in gold jewellery consumption.