Gold Prices May Decline to Rs 24,000 by Diwali: Industry Body

Following the easing of 20:80 gold import norms by the Reserve Bank, India Bullion & Jewellers Association (IBJA) on Thursday said gold prices are likely to fall to Rs 23,000-24,000 per 10 grams by Diwali as it also expects the customs duty reduction in the forthcoming budget.

"RBI's easing of 20:80 gold import norms is positive for the gems and jewellery industry. We expect this will be followed by reduction of the Customs duty to 4-5 per cent from the current 10 per cent in the forthcoming Budget, resulting in declining of gold prices and (price) is likely to be at Rs 23,000-24,000 by Diwali," IBJA president Mohit Khamboj told reporters in Mumbai.

The yellow metal is likely to be on par with the global prices as the premiums will also go down due to the positive steps taken by the government, he said.

"It will also reduce the gold inflow through the grey market."

The RBI on Wednesday eased gold import norms by allowing select trading houses, in addition to some banks, to procure the precious metal to boost exports. (Read more)

In July last year, the apex bank 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 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.

Meanwhile, gold prices in the spot market dropped by Rs. 800, or nearly 3 per cent, to Rs. 28,100 per 10 grams on Thursday - its lowest level since August. (Read more)