Gold price in Kerala jumps by ₹10,200 per sovereign after Centre hikes import duty

Gold prices in Kerala surged sharply on Wednesday after the Centre increased import duties on gold and silver to 15 per cent from 6 per cent. The price of a sovereign (8 grams) rose by ₹10,200, or 9.03 per cent, to ₹1,23,120 from ₹1,12,920 a day earlier.

The price hike follows the Central government’s decision to raise import duties on bullion and silver as part of measures aimed at curbing precious metal imports amid rising import bills linked to the ongoing Middle East crisis.

The move comes days after Prime Minister Narendra Modi urged the public to exercise restraint in gold purchases amid economic uncertainties arising from the Middle East conflict.

The crisis in the Middle East has heightened concerns over India’s economy, with crude oil prices rising following disruptions in the Strait of Hormuz, a key shipping route through which a significant share of global oil supplies passes. India relies heavily on oil imports routed through Hormuz, and higher crude prices are expected to increase the country’s import bill and put pressure on external balances.

India has limited domestic gold production and depends heavily on imports to meet demand, making gold purchases a contributor to foreign exchange outflows.

According to the Reserve Bank of India, India’s foreign exchange reserves declined by $7.7 billion to $690 billion for the week ending May 1. Gold reserves also fell by $5 billion to $115 billion during the same period.

As part of broader calls for economic prudence, Modi had also urged citizens to reduce non-essential travel to save fuel and cut dependence on chemical fertilisers.

In the international market, gold was trading at $4,700.63 per ounce. In Indian markets, gold futures jumped 7.2 per cent to ₹1,64,497 per 10 grams, while silver futures surged 8 per cent to ₹3,01,429 per kg.

In Kerala, the price of one gram of gold rose to ₹15,390 from ₹14,115, according to the All Kerala Gold and Silver Merchants Association, which determines the daily gold and silver rates across the state. The price of 18-carat gold stood at ₹12,710 per gram.

Silver prices in the state also increased by ₹20 to ₹310 per gram from ₹290 a day earlier.