Gold Prices Crash ₹5,000 per 10g After Customs Duty Cut: Crucial Insights for Buyers and Gold and Silver Rates Today, July 25: Check Latest Prices in Your City"

After Finance Minister Nirmala Sitharaman announced in the 2024 Budget that customs duties on gold would be reduced, gold prices dropped sharply by 7%, or Rs 5,000 per 10 grams, in local markets.

This drop has caught the attention of both investors and buyers because the lower customs duty has made gold imports cheaper. Analysts think this change will help reduce gold smuggling and support the growth of the organized jewelry sector.

Jateen Trivedi, VP Research Analyst at LKP Securities, said that although the reduction might cause some market instability, it offers a good chance for retail investors because of the lower gold prices.

"This might cause weaker market sentiments due to the sudden change, but retail investors will benefit from the new, more attractive gold prices," he told PTI. Krishnan R, Director & CEO of Unimoni Financial Services, agreed, saying that the lower costs will likely encourage more people to invest in gold, which is often seen as a protection against inflation and currency devaluation.

Following the budget announcement, which cut basic customs duties on gold and silver from 15% to 6%, gold prices fell significantly. In the national capital, gold prices dropped by Rs 3,350 to Rs 72,300 per 10 grams on Tuesday.

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The decline in gold prices continued on Wednesday, dropping by Rs 650. By Thursday, gold prices had fallen another Rs 1,000, settling at Rs 70,650 per 10 grams, according to the All India Sarafa Association.

In the past three sessions since July 23, gold prices have declined by Rs 5,000 per 10 grams, or 7.1%. Gold with 99.5% purity also dropped by Rs 1,000 to Rs 70,300 per 10 grams on Thursday.

Silver prices also fell sharply, decreasing by Rs 3,500 per kg to Rs 84,000 per kg. In the past three sessions, silver prices have dropped by Rs 7,000 or 8.3%, from Rs 91,000 per kg.

The decrease in gold prices has led to a surge in demand for jewelry as consumers rush to take advantage of the lower prices.

PC Jeweller Managing Director Balram Garg told PTI that this reduction in duties is likely to boost sales for jewelers ahead of the festive season.

MP Ahammed, Chairman of Malabar Group, said that this reduction has been a long-standing request from traders in the gold sector. It is expected to address the issue of gold smuggling, which poses a significant challenge to the economy. The duty cut reduces the cost of importing one kilogram of gold from Rs 9.82 lakh to Rs 3.93 lakh, making smuggling less profitable and more manageable.

In futures trading on the Multi Commodity Exchange (MCX), gold futures partially recovered on Friday after three days of declines. The August contract rose by Rs 288 to Rs 67,750 per 10 grams. However, silver contracts for September delivery continued to fall, dropping Rs 241 to Rs 81,090 per kg.

Market experts suggest that gold prices may stabilize once there is more clarity on economic factors such as potential interest rate cuts by the US Federal Reserve.

"Gold prices fell to nearly a two-week low as investors praised the US economy's resilience and reduced demand for conventional safe-haven assets, putting severe downward pressure on bullion prices and dragging them to their lowest level. The stronger-than-expected Advance US GDP data supported the impression that the economy was performing strongly," said Renisha Chainani, Head Research at Augmont - Gold For All.

"The US Bureau of Economic Analysis announced that the economy grew at a 2.8% annualized rate in April-June, compared to a 1.4% increase in the previous quarter and a 2% forecast. The $2,350 level is crucial. If gold remains above this level, we may witness a positive turnaround or at least a consolidation period, with upward resistance at $2,385, $2,400, and $2,425. Meanwhile, if gold prices sustain below $2,350 (Rs 67,400), we can expect a downfall up to $2,300 (around Rs 66,000)," she added.

Also Read:

Gold and Silver Rates Today, July 25: Check Latest Prices in Your City

Gold and Silver Rates Today, July 25:

Gold Rates:

• The gold rate for 24 carats in India rose to Rs 69,120 per 10 grams, up by Rs 400 on July 24.
• The rate for 24 carats gold per gram is Rs 6,912, up by Rs 40.
• The rate for 22 carats gold is Rs 63,360 per 10 grams, up by Rs 367.

In the last week, 24 carats gold has dropped by 7.1%, and in the last ten days, it has fallen by 6.15%.

Silver Rates:

• The silver rate is Rs 847.7 per 10 grams, up by Rs 2.2.

Gold Rates in Major Cities:

Delhi:

• Rs 69,000 per 10 grams on July 25.
• Rs 68,610 per 10 grams on July 24.
• Rs 74,240 per 10 grams on July 18.

Mumbai:

•  Rs 69,120 per 10 grams on July 25.
•  Rs 69,120 per 10 grams on July 24.
•  Rs 74,370 per 10 grams on July 18.

Chennai:

• Rs 69,320 per 10 grams on July 25.
• Rs 69,320 per 10 grams on July 24.
• Rs 74,590 per 10 grams on July 18.

Kolkata:

• Rs 69,020 per 10 grams on July 25.
• Rs 69,020 per 10 grams on July 24.
• Rs 74,270 per 10 grams on July 18.

Silver Rates in Major Cities:

Delhi:

• Rs 85,180 per kg on July 25.
• Rs 85,180 per kg on July 24.
• Rs 91,640 per kg on July 18.

Mumbai:

•  Rs 84,770 per kg on July 25.
•  Rs 84,770 per kg on July 24.
•  Rs 91,800 per kg on July 18.

Chennai:

•  Rs 85,020 per kg on July 25.
•  Rs 85,020 per kg on July 24.
•  Rs 92,060 per kg on July 18.

Kolkata:

•   Rs 84,660 per kg on July 25.
•   Rs 84,660 per kg on July 24.
•   Rs 91,670 per kg on July 18.

Related Link:

https://www.business-standard.com/markets/commodities/gold-price-slips-rs-10-to-rs-68-720-silver-declines-rs-100-to-rs-88-400-124072700057_1.html