The World Gold Council suggested that India's gold market could be supported from the economic boost recent financial and fiscal reforms could deliver. The announcement from Finance Minister Arun Jaitley to focus on formulating gold policy to develop gold as an asset class as well as re-development of Gold Monetisation scheme would work in favour of the market.
GMS, the council said, if implemented correctly would result in a customer ease to open gold deposit scheme accounts. It would also bring efficiency to a fragmented market that observes different price in different cities. This would further boost investor confidence in gold as an asset class.
The World Gold Council observed that the budget was in the right direction. The council called it a coherent policy, that would make gold-markets more efficient, transparent and trust-worthy. The council was positive in its outlook, mainly based on the following:
Department of Consumer Affairs working on a legislation to make hallmarking mandatory. Development of modern infastructure in the form of new jewellery parks, which will be home to manufacturers, hallmarking centres, banks and logistical support. Bureau of Indian standards looking to produce good delivery standards for 1 kg bullion bars processed at local refineries.
The council outlined that the Union Budget was a positive for India's gold industry. Gold in the past two trading sessions has jumped, recording the biggest weekly gain in two years.
On Friday, the yellow metal recorded a weekly gain (the most in two years), owing to weaker U.S. dollar and investors looking to hedge against inflation. According to Reuters, spot gold was up 0.4 percent at $1,358.40 an ounce as of 0801 GMT, after touching a three-week high of $1,360. The weekly gain was over 3% in the week so far.
The dollar slipped to a three-year low against a basket of currencies on Friday, and was headed for its biggest weekly loss in two years, as bearish factors offset support the U.S. currency could take from rising Treasury yields.
U.S. Spot gold gained 4% from a one-month low of $1,306.81 last week, mostly on a weaker dollar. Another factors analysts reasoned was the start of physical buying, ahead of Chinese New Year
In the domestic market, price of 24Karat and 22 Karat Gold was up by 1.2% in Delhi, 1.01% in Mumbai and 0.51% in Chennai. Gold in Delhi quoted price of 3160.42 per gram for 24 Karats and Rs 2955 per gram for 22 Karats.
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