Industry officials stated that the significant decrease in import duties has made gold prices attractive, comforting retail consumers and stimulating purchases. As a result, demand for the metal is expected to remain strong in India during the forthcoming festive season.
The second-largest gold consumer in the world may see increased demand, which could fuel a rise in prices that culminated last week in a record high. However, a rise in the demand for gold imports might worsen India’s trade imbalance and weaken the rupee.
According to Sachin Jain, CEO of the World Gold Council’s Indian operations, retail customers will primarily benefit from the lower duty cut. To combat smuggling, India reduced import duties on gold in July from 15% to 6%.
On the fringes of the India Gold Conference, Jain told Reuters there will be a huge demand during the festival season.
The end of the year, when bullion purchases are regarded as auspicious, coincides with the traditional wedding season and important festivals like Diwali and Dusherra, which typically increase the demand for gold in India.
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