The spurt in demand of gold jewellery that Finance Minister Nirmala Sitharaman’s announcement of reduction of import duty from 15% to 6% while presenting the Union budget on July 23, 2024, is poised to get a further boost as the festive season and marriage season draws near, reports indicate.
World Gold Council data reveal that India imported about 140 tons of the metal in August, a figure that is more than 3 times the import figure in July.
Gold import surge in August
The jump in gold imports stands out especially against the figure of 305 tons in the first half of this year which marked an increase of 4.8% compared to the figure in the same period last year.
Boosted by the rising demand, the price of the yellow metal is marching north. It reached levels of Rs 76,000 on MCX on September 25. Speuclations are rife that it might kiss the psychological level of Rs 80,000 by the end of this year.
Reports said jewellery brands such as Senco Gold have reported a significant rise in footfalls following the cut in duty. “It was a pleasant surprise. We expected a rise in footfall around 10%,” Suvankar Sen, managing director of Senco Gold & Diamonds told News9live.
FM’s boost by slashing duty
Joydeep Sircar, director of B Sircar Johuree also welcomed the decision by Sitharaman to sacrifice revenue in order to bring down the price that had shot through the roof in May-June touching Rs 75,400 for 10 grams of the 24-carat metal.
“To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent,” Nirmala Sitharaman had said while presenting the budget for FY25.
Cultural value
Sircar expects the positive push in sales to receive impetus from the monsoons which augur well for healthy income in the hands of the farmers in the country. “The value of gold in the traditional Indian mindset cannot be set in terms of price. It is actually a cultural symbol,” he remarked.
Diwali, Dhanteras and the marriage season in December-Janaury are the 3 factors that can boost the consumption of gold, according to jewellers. Despite high prices, demand for the metal surged during Diwali-Dhanteras in 2023 too.
Though investment strategists never fail to emphasise the advantages of investing in gold-linked investment instruments rather than on physical gold, the demand for gold jewellery remains high in India. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
