WGC Foresees Soft Gold Trade Sentiment in India Through 2020

SEATTLE (Scrap Monster):  The consumer appetite for gold and the general gold trade sentiment in India for the yellow metal are likely to remain soft through 2020, says the latest report published by the World Gold Council (WGC).

In its ‘Gold Outlook 2020’ report, the world trade body noted that gold purchases in India may be impacted by projected high volatility in gold prices and prevailing high tax rate structure in the country. However, the structural reforms that are currently underway may provide support for gold demand in the long term.

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The policy reforms, including mandatory hallmarking requirements, are expected to improve confidence, build consumer trust and promote growth. Although these factors tend to be positive for long term gold demand growth, it may take more time for the effects to become visible.

WGC noted that several factors, including price volatility and higher taxes, deter Indian consumers from investing in gold. The government must take immediate action to introduce tax cut, which in turn will spur economic growth. In addition, the government should take initiative on organizing consumer awareness campaigns on investment opportunities in gold.

The gold trade body suggested that the country must ensure setting up of a spot gold exchange this year itself, as announced before. The exchange would bring in transparency to gold trade and would benefit small jewellers as well.