Gold prices in the local markets have fallen sharply by seven percent or Rs 5,000 per 10 grams. This effect has happened after the government cut the customs duty on gold. Experts say that the lower cost will encourage more people to invest in gold both as a commodity and a financial asset. According to Bhasha news, analysts said that the reduction in customs duty has made gold imports cheaper. This move will curb gold smuggling and lead to growth in the organized jewelery sector.
Retail investors will benefit
According to the news, Jatin Trivedi, Vice President, Commodity and Currency Research Analyst at LKP Securities, said that the reduction in basic customs duty on gold prices has made this yellow metal cheaper. Although the sudden change may weaken the market sentiment, retail investors will benefit from the new and more attractive prices of gold. Krishnan R., Director and Chief Executive Officer (CEO) of Unimoni Financial Services, said that the lower cost will encourage more people to invest in gold.
When custom duty was reduced, the price of gold kept falling
As a commodity and as a financial asset, it is often seen as a hedge against inflation and currency devaluation. On Tuesday, the price of gold in the national capital fell by Rs 3,350 to Rs 72,300 per 10 grams after Finance Minister Nirmala Sitharaman announced a reduction in the basic customs duty on gold and silver from 15 per cent to six per cent in the budget. According to the All India Sarafa Association, gold prices continued to fall on Wednesday and it became cheaper by Rs 650. On Thursday, gold prices again fell sharply and fell by Rs 1,000 to Rs 70,650 per 10 grams. After the duty cut, the price of gold has fallen by Rs 5,000 per 10 grams or 7.1 per cent in the last three sessions. On July 23, its price fell by Rs 3,350 to Rs 72,300 per kg.
It will help in curbing smuggling
PC Jewelers Managing Director Balram Garg said the reduction in custom duty has boosted demand for jewellery in the domestic markets. This will boost sales for jewellers ahead of the festive season and lower prices will boost new purchases by consumers. Malabar Group Chairman MP Ahmed said gold sector traders had been demanding this for a long time. This is expected to curb the growing problem of gold smuggling. Smuggling is a major threat to the Indian economy. The new rates have reduced the duty on one kilogram of gold from Rs 9.82 lakh to Rs 3.93 lakh, which will help curb smuggling.
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