Gold drops to Rs.25,800 per 10 grams, demand soarstext_fields
New Delhi: Riding on the back of an improving global economy, gold prices dropped to Rs.25,800 per 10 grams in the national capital Friday coinciding with the spurt in demand during the wedding season.
"In the global market, in US dollar terms gold price is at four-year low and in India in rupee terms it is at 15-month low," Bachhraj Bamalwa, founder partner, Nemichand Bamalwa, told IANS.
"The main reasons behind this drop in gold prices is the improving global economy. The US has stopped quantitative easing. After 2008, this year is seen as the brightest year in the global economy. Even global jobs data are showing much better indications. Hence, people feel they can invest in riskier assets (like equity markets) and the return from it will be more than gold," he added.
Bamalwa, however, does not foresee any further downslide in the yellow metal prices.
"I don't see any further downslide in the price. If that happens, then maybe globally a lot of small mines have to shut down," he said.
Silver was trading at Rs.34,900 per kilogram Friday here.
Bullion traders feel this drop in price will boost sales ahead of the wedding season in India.
"This fall in gold price was on the expected lines only. What was due has happened. Indian consumers always thought gold price around Rs.25,000 per 10 gram is ideal. So that has happened at the right time when the wedding season is on," Ashok Minawala, board member of All India Gems and Jewellery Trade Federation told IANS.
"In general, this time demand is high and this year coupled with low prices, demand will be better," he added.
In Mumbai, gold price Friday was around Rs.25,300 per 10 grams.
India has slashed import tariff value of gold and silver Nov 1 to ascertain their import duty.
The tariff value for gold has been cut to $391 per 10 grams from $401, while that for silver has been reduced to $551 per kg from $575 per kg. These tariff values for a host of commodities are ascertained on a fortnightly basis.
The slash in tariff value on imported gold has been notified by the Central Board of Excise and Customs. The import tariff value is the base price at which customs duty is levied. It helps to prevent under-invoicing.