Mumbai: The prices of gold fell by around Rs 600 to Rs 800 per 10 gram in the domestic market after the Reserve Bank of India (RBI) on Wednesday eased some of the curbs imposed on the import of the yellow metal.
This is the biggest single day price drop registered by gold since August 2013. According to industry experts, the latest measures taken by the Reserve Bank would help improve the supply of gold from 25-30 tonnes per month to 55 tonnes per month.
On Wednesday, RBI allowed premier trading houses that are registered as nominated agencies with the director general of foreign trade to import gold under the 20:80 import schemes.
Earlier, only banks were given access to import gold through this channel. Under the scheme, an importer had to ensure that 20 per cent of each lot of imported gold had to be exclusively made available for the purpose of exports.
“The measures taken by RBI had an immediate effect on levels of premium on gold in the spot market which fell by almost 60 per cent when compared to their previous levels and led to a sharp fall in the prices by Rs 800 to Rs 28,100 per 10 gram in the spot market. In future, if RBI continues with such measures to ease import of gold, we might see further decline in the premium over international gold prices and this will give a boost to the supply of gold in India,” said Sachin Kothari, director, Bullion India.
“RBI’s decision to permit the nominated banks, to give Gold Metal Loans to domestic jewellery manufacturers out of the eligible domestic import quota of 80 per cent will also relax some cost pressure that the jewellers were facing in past few months,” said Somasundaram PR,MD, India, World Gold Council (WGC).
