The most-active gold for April delivery on the Multi Commodity Exchange was up 0.29% at R Mumbai: Physical demand for gold in India, the world’s top buyer, improved on Thursday, following a sharp overnight drop in world prices and on worries the government may raise import duty in the annual budget on Friday. The most-active gold for April delivery on the Multi Commodity Exchange was up 0.29% at Rs. 27,522 by 3:30pm, after falling 1.43% in the previous session. The contract Rs. 27,312 at one stage, the lowest for the front-month contract since 25 January. “Demand has improved significantly in the past two days. Prices have fallen and there is also concern about import duty hike in tomorrow’s budget,� said a Mumbai based dealer with a private bank dealing in bullion. In January, India raised gold import duty by 90% and doubled the tax on silver as the government grappled with a burgeoning fiscal deficit and looked to increase revenues. Demand is also driven by the ongoing wedding season, and festivals that run until mid-May. Overseas gold regained some strength on Thursday after a drop in the previous session attracted bargain hunters.

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