India saw a surge in gold demand following the announcement of a cut in customs duty on gold and silver to 6 percent from the earlier rate of 15 percent in the 2024 budget.
The customs duty reduction led to an immediate lowering of prices for the yellow metal, triggering customers’ rush, jewellery traders said.
Customers have rushed to jewellery stores to take advantage of lower prices, they said.
Jewellers have reported a rise in daily demand, with some experiencing a surge of up to 20 percent since the duty reduction.
They said they anticipate the high demand will continue through the festive season.
India imports nearly all the yellow metal it uses for jewellery and bars, with UAE being the second largest exporting country to the South Asian country.
Following the budget announcement, gold prices have dropped by nearly five percent to $826.63 (INR 69,194) per 10 grams on Wednesday from $867.43 (INR 72,609) per 10 grams on Tuesday.
The fall in prices has led to a notable increase in demand for yellow metal, particularly as the wedding season approaches.
On the Multi Commodity Exchange (MCX), gold prices declined over 1.5 percent on Thursday, in line with international bullion price trends.
Silver prices also dropped sharply, falling more than 4 percent as traders awaited key economic data from the US.
Internationally, bullion prices fell as investors took profits ahead of anticipated US economic data, which could indicate when the Federal Reserve might cut interest rates this year. According to Reuters, spot gold prices fell 0.9 percent to $2,377.29 per ounce, while US gold futures dropped 1.6 percent to $2,376.70.
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