Post Custom Duty Cut: Gold Prices fall Rs 5,000/10gm – Check Here
The recent reduction in custom duty on gold has led to a significant drop in gold prices, with a decrease of approximately Rs 5,000 per 10 grams. This reduction in prices is attributed to the government’s decision to slash the basic custom duty on gold, resulting in lower costs for buyers and encouraging more people to invest in gold as a commodity and financial asset. The decrease in duty has made gold imports cheaper, leading to a notable decline in gold prices in the local markets. This development is significant for buyers and investors in the gold market, and it reflects the potential impact of government policy changes on the prices of precious metals.
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The decline in gold prices has been notable over the past few sessions, with a further drop of Rs 650 on Wednesday, and by Thursday, gold prices had fallen another Rs 1,000, settling at Rs 70,650 per 10 grams, according to the All India Sarafa Association. In the past three sessions since July 23, gold prices have declined by Rs 5,000 per 10 grams, or 7.1%. Gold with 99.5% purity saw a drop of Rs 1,000 to Rs 70,300 per 10 grams on Thursday. This reduction in prices has led to a surge in demand for jewelry as consumers rush to take advantage of the lower prices.
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PC Jeweller Managing Director Balram Garg mentioned that this reduction in duties is likely to boost sales for jewellers ahead of the festive season.
The decrease in gold prices has also impacted silver prices, with a sharp decrease of Rs 3,500 per kg to Rs 84,000 per kg. In the past three sessions, silver prices have dropped by Rs 7,000 or 8.3%, from Rs 91,000 per kg. The reduction in custom duty has made precious metals more affordable, leading to a notable impact on the prices of silver and gold in the domestic market.
It’s important to note that the reduction in gold and silver prices is a significant development that has quickly impacted the market, making it an advantageous time for consumers to invest in these precious metals. The reduction in duty is expected to lower domestic prices and potentially increase demand for gold and silver.
In futures trading on the Multi Commodity Exchange (MCX), gold futures partially recovered on Friday after three days of declines. The August contract rose by Rs 288 to Rs 67,750 per 10 grams. However, silver contracts for September delivery continued to fall, dropping Rs 241 to Rs 81,090 per kg. Market experts suggest that gold prices may stabilize once there is more clarity on economic factors such as potential interest rate cuts by the US Federal Reserve.
The recent decline in gold prices to nearly a two-week low can be attributed to several factors, including the resiliency of the US economy and reduced demand for conventional safe-haven assets. Renisha Chainani, Head Research at Augmont – Gold For All, highlighted the impact of the stronger-than-expected Advance US GDP data, which supported the impression that the economy was performing strongly.
The US Bureau of Economic Analysis announced that the economy grew at a 2.8% annualized rate in April-June, compared to a 1.4% increase in the previous quarter and a 2% forecast. Chainani also provided insights into the crucial levels for gold prices, indicating potential positive turnaround or consolidation periods if gold remains above certain levels, as well as potential downward movements if prices sustain below a specific level.
The recent fluctuations in gold prices are influenced by various economic factors, including the performance of the US economy, geopolitical tensions, and the strength of the US dollar. The impact of these factors on gold prices reflects the complex interplay between economic data, market uncertainty, and investor sentiment. The reduction in custom duty on gold in India has also contributed to the dynamics of gold prices, making gold imports cheaper and leading to notable fluctuations in local gold markets.
The relationship between gold prices and economic factors such as interest rate cuts by the US Federal Reserve is a key consideration for market experts, who suggest that gold prices may stabilize once there is more clarity on these economic factors.The recent decline in gold prices has also affected silver prices, with a notable decrease in silver contracts for September delivery. The reduction in custom duty on gold and silver is expected to have a significant impact on the organized jewelry sector and is likely to boost sales for jewellers ahead of the festive season.
The insights provided by Renisha Chainani and the market experts underscore the intricate relationship between economic data, market dynamics, and the performance of precious metals such as gold and silver.
