Consumers, jewellers unmoved by lower price in Gold.

MUMBAI: Gold prices tumbled more than Rs 800 per 10 gm in the past four trading sessions through Wednesday intraday after the RBI eased restrictions on the trade. But consumers and jewellers are not rushing to buy the precious metal as they expect prices to fall further. They widely anticipate a reduction in import duty, which at present is 10%

The RBI has allowed more entities to import gold and lifted a year-old ban on banks to give gold on lease, making it easier for the gold trade, which has been against the restrictions that were imposed when India's current account deficit was widening alarmingly.

On Wednesday, the intraday spot price of gold was Rs 27,330 per 10 gm, down 3.1% from the high a week ago. Jewellers like Rajeev Sheth, CMD of the listed Tara Jewels, said order placement (by jewellers) had slowed amid speculation in markets of a likely cut in import duty, currently at 10%. Even Joy Alukkas, CMD of Kerala-based eponymous jewellery outfit, said jewellers preferred to "wait and see" whether the new NDA government cuts the high levy — which market circles hold responsible for the surge in smuggling — before placing orders.

RBI's move to allow star and premier trading houses to import gold, in addition to certain banks and agencies has pushed down premiums these entities charge to customers from 5-6% to 2-3%, said Manish Jain, MD, Pannalal Mahesh Chandra Jewellers, based in Delhi's Chandni Chowk area.

Source : economictimes.indiatimes.com