Gold prices in the country increased by 4.2% (Rs 2,985/gram) in a month to Rs 74,093 per ten grams. After import duties were reduced in the budget, prices increased more than they had decreased. Despite this, experts believe that the demand for gold will create a record during the festive period.
With the reduction in import duties, it has become easier to import gold from abroad. It affects all jewelers in the country. According to an estimate, the demand for gold will increase by more than 30% this festive season. India’s gold imports increased more than three times in August after import duties on gold were reduced in the General Budget.
According to the commerce ministry, monthly imports stood at $10.06 billion (Rs 84,453.7 crore) in August, compared to $3.13 billion (Rs 26,276.35 crore) in July. The main reason for this increase is the holiday season. It is expected to be in high demand. The import duty on gold was 15%, which was reduced to 6% in the budget.
Gold demand will remain high during festivals According to experts, due to falling prices in the global market, the demand for gold is estimated to remain high during the festival. The reason is that now most of the gold will come to India through legal channels. Vipul Shah, Chairman, Gems and Jewelery Export Promotion Council, says, “Due to reduction in import duty, the inflow of gold from abroad has increased. »
Demand will increase by 42 lakh weddings by December According to the Confederation of All India Traders (CAT), 42 lakh weddings will take place in November-December. This includes around Rs 5.5 lakh crore. There will be expenses. Jewelry is one of the three main sectors that will receive a significant portion of this spending.
Coins and wands are also in high demand, as well as jewelry. Anuj Gupta, Head of Commodities and FX, HDFC Securities: The dollar weakened due to the unexpected 0.5% cut in interest rates by the US Fed. In such a situation, other asset classes, including gold, suddenly shined. After Navratri, the festive season will soon be in full swing. In such a situation, there seems to be a huge demand for gold.
People want to buy gold coins and bars as well as jewelry. During festive and wedding periods in the country, the demand for gold could increase by 30% compared to last year. Investors also withdraw money from the country’s stock markets and buy gold, so that in the event of a market correction, they can secure part of the investment in the form of gold.
Demand for gold ETFs has increased Investments in gold exchange-traded funds (ETFs) are also increasing. Gold ETF net inflow into the country increased by 80% in July from June to Rs 13,400 crore. Achieved. The total investment this month is Rs 14,600 crore. It remained, but Rs 1,200 crore was withdrawn.
This is the largest investment in ETFs in a single month in four and a half years after February 2020. According to RBI, the trend of investments in gold will continue in the future as well. In August, the RBI had purchased 8.2 tonnes of gold, taking the bank’s purchases for the entire year to 44.3 tonnes. This is the highest in two years. The total gold held by RBI is 849 tonnes.