WGC: Import Duty Cut Boosted India Gold Demand

SEATTLE (Scrap Monster): The World Gold Council (WGC), in its latest India gold market update report, said that lowering of import duty on gold has boosted demand for the yellow metal in the country, just ahead of the festive season.

According to Kavita Chacko, Research Head-India, WGC, the domestic gold prices have witnessed a decline by 9%, despite rise in international gold prices, mainly due to significant reduction in import duty on gold announced in the Union Budget. The duty cut has resulted in 6% decline in the landed cost of domestic gold.

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Despite this decline, the domestic gold prices in the country are still higher by 10% on a year-to-date basis. This is mainly due to global gold price strength. It must be noted that international gold prices have recorded significant surge by over 18% during the year-to-date period in 2024.

The WGC report noted that the Reserve Bank of India (RBI) has continued to remain as a consistent gold buyer. The gold-backed exchange traded funds (ETFs) too recorded substantial inflows during July this year. The gold imports too maintained their momentum during the previous month.

Looking ahead, the budget policy measures in support of gold are likely to positively impact the domestic gold market. This may result in additional gold demand of around 50 tonnes in the second half of 2024, WGC report said.