Gold Prices touched all-time high and Gulf jewelers observing closely

Jeddah: Gold rates climbed to a new life-time high of ₹58,060 per 10 gm on Wednesday in India and prices become volatile amid budget speech of Finance Minister Nirmala Sitharaman and went on to climb to its record high by the time FM finished her speech in the parliament.

Though the Government didn’t impose any new taxes on Gold imports in its latest budget, yet, the price of 22 carat gold weighing 10 grams raised up to Rs. 52,900 and 24 carat gold to Rs. 58,060 as MCX price. At the same time the price of one kg silver increased to ₹73,300. The bullion traders expecting the price to hit Rs. 60,000 shortly.

Currently, basic customs duty on gold is 12.5% and 2.5% agricultural infrastructure cess, 3% is GST and another about 5% goes as making charges. This has primarily led to a rise in the key input cost for the Indian jewelry industry.

The cost factors prompted many people to look into the Gulf market for better deals with beautiful designs. Whether seasonal visitors to Dubai or religious pilgrims to holy cities in Saudi Arabia prefer to purchase gold from abroad.

It is noteworthy to mention that most of the gold that is imported in India comes from Dubai and other gulf countries.

However, overall gold prices in the Gulf region particularly in UAE will remain lower compared with India.

“Despite high duty back home in India, an Indian visitor can save Rs. 20,000 for 5 tolas” explained Shekhar, native of Vijayawada and works as sales executive in a leading gold jewelry shop in Dubai.

He told this correspondent over the phone that most shops in Dubai and other parts of the Gulf have significant customers from India where cost is matter.

The government hiked the import duty on gold from 7.5% to 12.5% in July 2022 to dampen demand, bring down the trade deficit and ease pressure on the rupee.

The result was a steep reduction in imports of gold from 1,068 tonnes in 2021 to 706 tonnes in 2022. The duty hike also resulted in increased smuggling of gold into India, an estimated 200 tonnes a year, and that is actually driving the gold retail sales, say industry sources.