Gold Prices Drop by Rs 650 Amid Import Duty Cut, Weak Jeweller Demand

Gold Prices Drop by Rs 650 Amid Import Duty Cut, Weak Jeweller Demand

Ashiq Butt | July 25, 2024 | 04:38 PM IST | Breaking News | Follow on Google News

Gold Prices Drop by Rs 650 Amid Import Duty Cut, Weak Jeweller Demand

Gold Prices Drop by Rs 650 Amid Import Duty Cut, Weak Jeweller Demand

Key Highlights:

1. Gold prices fell by Rs 650 to Rs 71,650 per 10 grams in Srinagar.
2. Import duties on gold and silver were cut from 15% to 6%.
3. Comex gold prices rose, creating a disparity with domestic prices.

Gold prices in Srinagar dropped by Rs 650 to Rs 71,650 per 10 grams on Wednesday, continuing a two-day decline due to weak demand from jewellers and the recent import duty cut announced in the 2024-25 budget. The precious metal had closed at Rs 72,300 per 10 grams on Tuesday after a significant drop of Rs 3,350.

According to the All India Sarafa Association, gold of 99.9% and 99.5% purity slumped to Rs 71,650 and Rs 71,300 per 10 grams, respectively. In contrast, silver prices remained steady at Rs 87,500 per kg in the local market.

The decline in gold prices is attributed to the government’s decision to slash customs duties on gold and silver from 15% to 6%. Over the past two sessions, gold prices have decreased by Rs 4,000 per 10 grams.

“Gold and silver on the domestic front languished as the Finance Minister’s announcement of a duty cut took the market by surprise,” said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd.

He added that domestic prices might take time to adjust to the full impact of the duty cut and align with Comex prices.

Internationally, Comex gold was trading at USD 2,461.20 per ounce, up by USD 6 per ounce. “Comex gold prices held above USD 2,400, breaking a four-day losing streak as the market awaited clarity on the US Federal Reserve’s first interest rate cut,” noted Kaynat Chainwala, AVP-Commodity Research at Kotak Securities.

Pranav Mer, Vice President, EBG – Commodity & Currency Research at JM Financial Services, highlighted that gold prices are positively tracking gains in the overseas market and receiving buying support at corrective levels post the sharp sell-off due to duty cuts.

Traders are now focusing on the upcoming US GDP data and Personal Consumption Expenditures (PCE) inflation data for further insights into the Fed’s rate cut path.

Ashiq Butt

Ashiq Butt – is VoM News's senior staffer worked since year 2015 and he deals with correspondency and social media handles. Hailing from Doda's Marmat, Ashiq has strong grip over the collection of the data and it's compiling feature.