Ajeet Kumar
Gold prices are likely to decline below Rs 25,000 per 10 grams in the near term due to easing of import norms amid expectations of reduction in customs duty in the forthcoming Budget.
Shiv Shrivastava, MD & CEO, IGuru Research opined gold prices may face an upward push and see a range of Rs 25,750- Rs 26,500 per ten grams in the coming week.
He further said RBI's easing of 20:80 gold import norms is positive for the gems and jewellery industry.
All India Gems and Jewellery Federation (GJF) Director Bacchraj Bamalwa said, "It seems gold import may increase in coming months by 10-15 tonnes per month as the mood in market is positive as new and stable government has emerged after the results and the latest relaxations by RBI."
Analysts expect a reduction of the customs duty to 4-5 percent from the current 10 percent in the forthcoming Budget, resulting in declining of gold prices.
The RBI had eased gold import norms by allowing select trading houses, in addition to some banks, to procure the precious metal to boost exports.
The decline in the gold prices was at futures trade was also in line with a weakening trend overseas, analysts added.
Gold in overseas markets, which normally set price trend on the domestic front, last quoted at USD 1,243.06 an ounce Thursday. The yellow metal is close to its four-month low of USD 1,240.61 hit earlier in the week.
However, gold prices recovered by Rs 40 to Rs 27,240 per 10 grams at Delhi bullion market yesterday on emergence of buying at existing lower levels amid a better trend in global markets.
In July last year RBI had imposed severe restrictions on gold imports to check burgeoning current account deficit and depreciating rupee.
Under the 20:80 scheme an importer has to ensure that at least one-fifth, or 20 percent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.
Gold premiums in India almost halved on hopes the new government would ease restrictions on imports of the precious metal, while demand in rest of Asia failed to pick up despite a drop in prices.
Indian premiums fell to USD 30-USD 40 an ounce over the global benchmark, from USD 80-USD 90 last week.
At international level, gold prices fell 28 percent last year, the first annual decline in 13 years, releasing pent-up demand across the world. The metal has gained about 4 percent so far this year.
