With gold prices dropping since May 16, when the results to the Lok Sabha were declared, locals have stopped buying gold jewellery fearing further dip its prices. At present, the gold rate is hovering close to Rs 28,000 per 10 gm.
However, last year the prices had touched Rs 32,000 per 10 gm due to which the Reserve Bank of India (RBI) had imposed restrictions on the import of gold in the country.
Since January, the cost of gold was around Rs 30,000 per 10 gm. However, the RBI in its latest directions issued a few days back provided some relief to dealers by allowing import of gold on the condition that one-fifth of the imported metal has to be exported.
City jewellers are worried over reports mentioning that the price of gold would further decline to Rs 24,000 per 10 gm by Diwali.
These reports have been refuted by the gold and jewellers associations which say that now there would be no further decline in gold prices and it would remain close to Rs 28,000.
President of Swarnkar Sangh Punjab Sarjeewan Dhir said, “A lot of expectations are laid on the new Prime Minister Narendra Modi who should relax custom duty on import of gold by at least 4-5%. At present, the custom duty on import of gold is 10%, which increases its cost excessively.”
He said there were at least 3,000 retail outlets of gold in Ludhiana and he was upset over reports stating that gold prices would come down to Rs 24,000 by Diwali.
“I do not think that there would be such a decline in gold prices. The prices may come down by another Rs 1,000, but not more than that,” added Dhir.
President of Ludhiana Jewellers Association Anand Sikri said, “Gold dealers were already under pressure due to ceasing of import on gold.
Now, when some relaxation has come from the RBI, false reports of excessive decline in gold prices by Diwali has hit the jewellers to a great extent.”
He added that people were not purchasing gold owing to these reports.