Indian gold prices dropped nearly 2% on Wednesday to their lowest since early May, falling below pre-duty-hike levels following a sharp decline in global bullion prices. The price correction could boost gold demand in the world's second-biggest consumer of the precious metal and lead to higher imports, dealers said. Domestic gold futures fell 1.93% on Wednesday to 149,500 rupees per 10 grams, their lowest level since May 5. India last month raised import tariffs on gold and silver to 15% from 6%, as part of efforts to curb overseas purchases of the metals and ease pressure on the country's foreign exchange reserves. "Gold jewellery demand has been subdued in recent weeks. The correction in prices could encourage buyers to return," said a Mumbai-based bullion dealer with a private bank. India's sharp increase in gold import tariffs is fuelling a resurgence in smuggling that could exceed 100 metric tons this year, as soaring grey market margins allow smugglers to undercut banks and refiners of the precious metal, industry officials and bullion dealers said.
Gold falls below pre-duty-hike levels as overseas prices drop
Gold prices in India have fallen significantly, reaching their lowest point since early May. This price drop is expected to encourage more buyers to return to the market. Dealers anticipate higher demand and increased gold imports into the country. The recent increase in import duties had previously dampened demand, but this correction may revitalize the market.
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