Substantial reduction in import duty has made gold prices more attractive. This is expected to keep the demand for gold in the country strong in the upcoming festive season. Sachin Jain, CEO of World Gold Council, said, reducing the import duty on gold from 15 per cent to 6 per cent has provided relief to retail consumers and boosted purchases. Asher O, Managing Director of Indian Operations of Malabar Gold & Diamonds, said, the duty cut has changed the sentiment among retail consumers, who were postponing purchases due to price rise. He said, without the duty cut, gold prices could have touched new record highs above Rs 80,000, but now they are trading below the highest level.
Increasing demand for gold in India could fuel the rally in global prices, which hit a record high last week. However, rising demand for gold imports could widen India’s trade deficit and put pressure on the rupee. Global gold prices hit a record high last week, but domestic prices in India hovered around Rs 71,800 per 10 grams on Monday.
