Gold prices have fallen sharply by 7%, or Rs 5,000 per 10 grams, following the government's decision to slash the basic customs duty on gold. This reduction has made gold imports cheaper and is expected to curb gold smuggling, benefiting the organised jewellery sector. Experts believe that the lower costs will encourage more investments in gold as both a commodity and a financial asset. "The cut in basic customs duty on gold prices makes the yellow metal cheaper," said Jateen Trivedi, VP Research Analyst at LKP Securities.
Impact on jewellery demand
The significant price drop has revived consumer demand for jewellery, with traders reporting increased footfall in jewellery outlets. "This will act as a sales booster for jewellers before the festive seasons," said Balram Garg, Managing Director of PC Jeweller.
Gold and Silver prices
Following the Budget announcement, gold prices in Delhi fell to Rs 70,650 per 10 grams, while silver prices dropped to Rs 84,000 per kg. The reduction has been welcomed by the market, as it addresses long-standing demands to curb smuggling and support the organised sector.
Outlook and future stability
Gold futures on the MCX have shown partial recovery, with the most traded August contract rising. Market experts predict stability in bullion prices once there is clarity on economic and political factors, such as potential interest rate cuts by the US Federal Reserve.
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