By Paul Ploumis 24 Jul 2015 Last updated at 07:53:42 GMT

MUMBAI (Scrap Monster): The Indian Government today announced cut in import tariff value for gold and silver. The import tariff value of gold was slashed by nearly 6%, in accordance with prices of precious metals in the international market. Meantime, tariff value on imported silver has been left unchanged.

The Central Board of Excise and Customs (CBEC) issued notification in this regard reducing the gold import tariff value to $354 per 10 grams. The import tariffs are being slashed from the existing $376 per 10 grams. Meanwhile the import tariff value of Silver has been kept unchanged at $498 per kilogram.

The government move to lower the import tariff value is in primarily on account of weakening gold prices in the global and domestic markets. The possibilities of US Fed raising rates by September this year have also hit the sentiments badly for gold.

Meanwhile, gold prices edged lower on Singapore session today, on the back of rising dollar strength and higher US interest rate hopes. The prices slipped to five-year low level of $1,084.80 per Oz. Many brokerages have downgraded their earlier forecasts on gold prices. For instance, Macquarie has cut its gold price forecasts by 7% to 15% from this year through 2019, signaling a possible long term downtrend for the yellow metal. The investment firm has cut its gold price estimate for the current year to $1,152 per Oz from the earlier $1,249 per Oz.

The gold in India declined almost Rs 320 per 10 grams to Rs 25,050 per 10 grams on declining demand from retail buyers. Industrial demand for gold also remained weak. Silver too witnessed significant fall on lack of demand. The prices dropped by Rs 380 per kg to touch Rs 33,950 per kg.

Tariff value is the base price on which the customs duty on imported gold or silver is calculated and it further helps prevent under-invoicing.