Gold Demand Slides Due To Import Curbs

Decline In Gold Import Narrows Trade Deficit
  • The high import duty and supply curbs on gold imposed to reduce the current account deficit has had a substantial effect its demand as it slid by 26%, value terms reduced by 33% and dollar terms by 41%, besides a reduction in jewellery demand and investment demands in the first quarter.
  • The new govt is expected to lift the curbs leading to a reduction in the prevailing premium.
  • Global gold demand was also lower in Q1. While total global jewellery demand increased, investment demand slid.
  • Consistency of long term underpinning of the gold market, such as jewellery demand, demonstrates the robust and unique nature of the gold market, which rebalances to reflect demand.
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Exams Perspective:

  1. Bullion
  2. Stock Market
  3. CAD
  4. Smuggling