Gold Market Sees Sharp Correction Following Customs Duty Cut

Gold prices have drastically fallen by 7% or Rs 5,000 per 10 grams due to a government-imposed cut in basic customs duty. This change is expected to spur investment in gold, benefiting retail investors and curbing smuggling. The new rates have also triggered increased consumer demand for jewellery.

Gold prices have experienced a significant correction, dropping by 7 percent or Rs 5,000 per 10 grams in local markets. This comes after the government slashed the basic customs duty on gold, making it more affordable for investors. Market analysts predict this will encourage more investments in gold as both a commodity and a financial asset.

Experts believe the reduced import costs will help curb gold smuggling, leading to growth in the organized jewellery sector. Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, highlighted that the cut would benefit retail investors by offering more attractive pricing.

Krishnan R, Director & CEO of Unimoni Financial Services, echoed similar sentiments, noting that lower costs would likely increase investments in gold as a hedge against inflation and currency devaluation. Following Finance Minister Nirmala Sitharaman’s Budget announcement, gold prices plunged in the national capital, reflecting the new duty rates.