Gold futures fall on hopes of customs duty cut

MUMBAI: Gold futures are trading lower than the spot price on the Multi Commodity Exchange amid widespread expectations that the government will announce a customs duty cut on the metal in the forthcoming Union budget.

Gold for April delivery was trading at Rs 26,290 per 10 gm, up 0.78% from its previous close, at 1pm on Wednesday, while the June contract was trading at Rs 26,456, up 0.86%. This means that the two futures contracts were trading at a discount of Rs 352 and Rs 186, respectively, from the spot gold that was trading at Rs 26,642.

“This indicates that markets are pricing in a cut in import duty," said Gnanasekar Thiagarajan, director at commodity firm Commtrendz.

Thiagarajan, however, said he did not expect the government to rationalise duty, at 10% currently, as that could add further pressure to the revenue account.