By Paul Ploumis 23 Jul 2015 Last updated at 08:46:22 GMT
NEW DELHI (Scrap Monster): The Indian government announced that it has no immediate plan to hike gold import duties. Any rise in import duty could lead way for increased gold smuggling, it noted. Further it noted that increase in gold import duty may badly impact the industry.
According to government officials, the drastic fall in gold prices is likely to trigger fresh bout of purchases, ahead of the upcoming wedding season demand. Household purchases are likely to remain robust, mainly on account of normal monsoon season in the country. Meantime, gold imports may remain flat in the coming months as banks and importing agencies are reportedly holding adequate gold stocks.
Trade sources indicate that the plunge in gold prices has not resulted in rise in gold demand in the country. Analysts warn further downside risks to gold in case of US Fed rate hike later in the year. This has taken a lot of investor money from the safe-haven asset into stock market and other performing financial instruments that have yielded decent return to investors over the past several months.
The overall gold demand has seen sharp decline in the country during the first quarter of the current fiscal year. Retail sales are down. Many jewellery stores in the country indicate that footfalls have not improved considerably despite gold touching the lowest level in five years.
Meantime, gold imports by the country during June totaled $1.96 billion, significantly lower when compared with the previous months this fiscal. The country’s gold imports during April and May this year had totaled $3.13 billion and $2.42 billion respectively. Also, gold imports during June ’15 were significantly lower when compared with $3.12 billion in June 2014.