Gold and Silver Demand Soars Amid Festive Season Price Hike

Reduced Import Duties Expected to Boost Local Market and Exports

Surat: With the festive season approaching, the demand for gold and silver in Surat has risen sharply. Following a reduction in import duties on these metals from 15% to 6% as announced in the 2024-25 budget by Union Finance Minister Nirmala Sitharaman, the price of 10 grams of gold has decreased by approximately Rs 6,000. Market experts now predict that gold prices may once again surpass Rs 75,000 by Diwali.

The reduction in import duty was aimed at lowering the local market price of gold, encouraging legal trade, and decreasing smuggling. “The reduced duty on pure gold and silver is expected to minimize smuggling and stabilize the local market, offering consumers better prices and legal traders higher margins,” said an Exim Trade expert.

Since the duty reduction, the price of gold dropped to Rs 70,000 from its peak of Rs 76,000, prompting a buying spree. Experts forecast that this trend will continue from August 2024 to March 2025. The World Gold Council has supported this outlook, linking increased buying to reduced income tax burdens, which have left more disposable income for consumers.

The import duty on impure gold and silver (gold and silver door) has also been reduced from 14.35% to 5.35%, providing an added incentive for buyers. The decreased duty on pure gold and silver coins complements this measure.

Local jewelers, like Rishabhbhai Sanghvi, Director of Rajratan Jewellers, are optimistic. “We’ve experienced a recession in the jewelry industry since February, but we’re seeing signs of recovery. The reduction in gold prices has spurred demand, and a 10% price increase by Diwali is likely,” he noted.

Similarly, silver prices have seen a substantial decrease, from Rs 92,000 per kg to Rs 82,000 per kg, following the duty reduction. Dilipbhai Tibrewal of Bishan Dayal Jewelers anticipates an 8-10% increase in silver prices by Diwali, driven by the upcoming festive and wedding seasons.

These economic shifts are expected to enhance India’s competitiveness in the global market and boost the jewelry export sector, signaling a positive outlook for the precious metals market in Surat.