AHMEDABAD: The decline in gold prices following the reduction in basic customs duty (BCD) on gold after the Union budget announcement boosted demand for the yellow metal. Some 3.78 metric tonnes of gold was imported in February this year in Gujarat against 1.31 MT in January, suggests data by Ahmedabad Air Cargo Complex (AACA). Gold jewellery demand grew due to the ongoing wedding season, however, purchases made through exchange of old gold also continued, which kept volume of imports under check.
“Jewellery demand significantly improved in the past few days with the wedding season at its peak. Moreover, reduction in Covid-19 cases since Uttarayan, the rollout of the vaccination, coupled with 200 persons being allowed at wedding occasions and social gatherings, added to the general confidence amongst people who are now organizing weddings,” said Jigar Soni, president, Jewellers’ Association of Ahmedabad (JAA).
“With more weddings taking place and a steep reduction in yellow metal price beneath the Rs 50,000-mark improved the sentiment significantly thus adding to the demand for gold jewellery,” Soni added.
Jewellers however were of the opinion that a number of purchases do take place through exchanging old gold and that people come with fixed budgets due to the ongoing recessionary trend. Gold imports rose to a 15-month high in February. The last time gold imports were at this level was in November 2019, when some 4.54 MT gold was imported into the state.
Impacted by the lockdown and a weakened consumer sentiment thereafter, gold imports stood at the lowest-ever level of 18.8 metric tonnes in 2020, according to data by Ahmedabad Air Cargo Complex.