New Delhi, May 14 -- India, the world's second-largest gold consumer, has raised tariffs on gold and silver to 15% from 6% to curb imports and ease pressure on its foreign exchange reserves. The move immediately pushed up precious metal prices, with both gold and silver surging nearly 6% on Wednesday.

Despite the recent sharp rally, silver remains significantly cheaper than gold. Even at its peak, silver prices touched around Rs.4 lakh per kg and are currently hovering near Rs.2.9 lakh per kg. In comparison, gold prices have climbed to nearly Rs.1.5 lakh to Rs.1.6 lakh for 10 grams.

Demand for gold jewellery was already weakening due to high prices, and further gains are likely to hit purchases in the short term and push buyers towards ...