Reduction in customs duty on gold during Budget 2024

Duty cut has triggered a substantial increase in gold demand

Post budget gold prices decreased by Rs 3,415 per 10 grams

In a significant move, Finance Minister Nirmala Sitharaman announced a reduction in customs duty on gold during Budget 2024, prompting a rush to jewellery stores as customers seek to capitalize on lower gold prices.

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The duty cut has triggered a substantial increase in gold demand, especially with the wedding season approaching. As India is the world’s second-largest gold market, this reduction has had a profound impact. Customers are flocking to purchase heavier pieces of jewellery, which were previously unaffordable when gold prices peaked at Rs 74,000 per 10 grams.

Jewellers across the country are reporting a surge in daily demand, with some seeing up to a 20% increase since the duty cut. Anticipating continued high demand through the festive season, many jewellers have canceled craftsmen’s leave to ensure they can meet the needs of their customers. Given that India imports nearly all the gold used for jewellery and bars, the reduction in customs duty has significant implications for both buyers and sellers.

Following the budget announcement, gold prices dropped from Rs 72,609 per 10 grams on Tuesday to Rs 69,194 per 10 grams on Wednesday, a decrease of Rs 3,415 per 10 grams.

The government’s decision to cut the customs duty on gold imports from 15% to 6% has evidently made a substantial impact on the market.

As prices drop and demand soars, now might be the opportune time for consumers to invest in gold.