Gold prices soar amid wedding season; Decrease possible if central government intervenes

NEW DELHI: The current market price of one sovereign of gold stands at Rs 53,080, with the price per gram at Rs 6,635. However, when purchasing one sovereign of gold from jewelers, including GST and labour charges, consumers are expected to pay at least Rs 60,000. As the wedding season approaches, gold prices are anticipated to rise further.

A decrease in gold prices is contingent on central government intervention. The gold market stakeholders are eagerly awaiting the budget to be presented by Union Finance Minister Nirmala Sitharaman at the end of this month, hoping for a reduction in import duty. Currently, the import tax on gold is 15 percent and there is a demand to reduce it to 10 percent.

All Kerala Gold and Silver Merchants Association has petitioned Finance Minister Nirmala Sitharaman for a tax reduction. The increase in duty has led to a rise in gold imports, driving up gold loan rates due to higher profit margins. During this period, the number of people investing in gold as a profitable venture has also increased.

A reduction in import duty could make gold smuggling less attractive. Gems and Jewellery Promotion Council believes this would curb illegal gold imports. However, industry experts are skeptical about a return to the previous 10 percent duty, given the recent increase from 11 percent to 15 percent. A reduction to 12 percent would still be a significant gain for traders and consumers.