Gold tanks Rs 1,324, silver jumps Rs 3,641

New Delhi, Feb 01: Gold in the national capital on Monday tumbled Rs 1,324 to Rs 47,520 per 10 gram on a day when the government announced cut in import duty on gold and silver, according to HDFC Securities.

In the previous trade, the precious metal had closed at Rs 48,844 per 10 gram.

Silver, in contrast, jumped Rs 3,461 to Rs 72,470 per kilogram from Rs 69,009 per kilogram in the previous trade.

In the international market, gold was trading in the green at USD 1,871 per ounce and silver also quoted with gains at USD 29.88 per ounce.

The government on Monday announced a cut in import duty on gold and silver, a move that will help bring down prices of these precious metals in the domestic market and boost exports of gems and jewellery.

"Gold and silver presently attract a basic customs duty of 12.5 per cent. Since the duty was raised from 10 per cent in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising customs duty on gold and silver," Finance Minister Nirmala Sitahraman said while presenting the Union Budget 2021-22.

The customs duty on gold and silver was reduced to 7.5 per cent.

According to Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services, "Budget announcement related to cut in import duty cut from 12.5 per cent to 7.5 per cent hammered gold lower. This step has been implemented amidst recent rise in prices, smuggling and other factors.