MUMBAI : Gold markets in India witnessed a new surge with imports showing major gains in the beginning of the new year.
According to market analysts, gold imports climbed up around 19 fold to 34 tonned in January against 1.8 tonne in the year-ago period.
Reason for this gain is a major fall in prices from Rs 18,500 per 10 gm in December 2009 to Rs 16,500 per 10 gm.
Experts said gold import gained as prices declined to rule around Rs 16,500 17,000 levels in January, increasing consumer demand.
According to market analysts, import is likely to be hit after the government hiked customs duty by Rs 100 per 10 gm in the Budget from Rs 200 per 10 gm.
Analysts also said the move will lead to higher import cost, which in turn will affect domestic prices from March.
India’s recent Budget reduced basic customs duty on gold ore and concentrates from 2 per cent ad valorem to a specific duty of Rs 140 per 10 gm with full exemption from special additional duty, to encourage domestic gold refining capacity.
This implies that importers have to pay a fixed Rs 140 per 10 gm on gold ore and concentrates irrespective of the price.
However, the move will not have much impact on the domestic market much as the country mainly imports gold in the form of bars and coins.
Source : Commodity Online