Gold and silver prices fell today in India amid weak global cues and an appreciation in the rupee against the US dollar. On MCX, February gold futures fell 0.23% to ₹39,780 per 10 gram. Silver prices on MCX also fell 0.33% to ₹46,755 per kg. Gold prices in India had hit record highs of ₹41,293 per 10 gram last week amid an escalation in Middle East tensions. As fears of an further escalation of an Iran-US conflict faded, gold came off highs.
In global markets, gold prices today fell 0.4% to $1,555.76 per ounce ahead of signing of an interim trade deal between the US and China due later this week. Silver was down 0.2% to $18.05 per ounce. Gold rates had surged 18% last year amid a trade tussle between the US and China and concerns over global growth. A higher dollar also weighed on gold today, making the precious metal more expensive for buyers using other currencies.
Globally, indicating the investment sentiment, holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.86% to 874.52 tonnes on Friday from 882.12 tonnes on Thursday.
However, geopolitical tensions remained on the radar over the weekend. Iran admitted it downed a Ukrainian jet after mistaking it for a cruise missile. North Korea said it won’t trade its nuclear weapons for a lifting of sanctions.
Back in India, the rupee has pulled back from its recent lows of above 72 against US dollar. India imports most of its gold requirements and prices include 12.5% import duty and 3% GST.
Meanwhile, sovereign gold bonds opened for subscription today at ₹4,016 per gram. Investors applying online and making the payment against the application through digital mode get a discount of ₹50 per gram. For such investors, the issue price of gold bond will be ₹3,966 per gram of gold. Minimum investment in the bonds is one gram.
In terms of income tax benefits, no capital gains tax is payable in gold bonds if held till maturity. The maturity period is eight years. This benefit is not available in other gold instruments like gold ETF or gold funds.