Gold shines for both sellers and buyers; price falls by Rs 2,200 per sovereign in Chennai

CHENNAI: The Union Budget has brought smiles with the announcement of a cut in basic customs duty of gold and silver to 6 per cent from 15 per cent, and the price of yellow metal falling by Rs 2,200 per sovereign on the very day of the Budget proposal. The sellers in the city too have taken the development positively as it would bring them more business.

On Monday, the rate of gold in the Chennai jewellery market was Rs 6,825 per gram and Rs 54,600 per sovereign. By Tuesday noon, the rate fell to Rs 6,550 per gram and Rs 52,400 per sovereign. The rate of silver was Rs 95.60 per gram on Monday which came down by Rs 92.50 on Tuesday.

"The Budget proposal is heartening... it'll be a boon to our business. For the past six months, the gold rate was shooting up and customers were shying away from buying gold jewellery. After the announcement there was a sudden spurt in footfall in jewellery shops across the city; it's positive for both sellers and buyers," said Jayantilal Challani, president of the Jewellers and Diamond Traders' Association of Madras.

"As the customs duty has been slashed, the gold coming from the Gulf and the gold that is being sold by the jewellers here would almost be of similar rate. Within three days, the rate per gram would reduce by Rs 100-150 and sovereign by Rs 1,200. This would also lead to a decrease in illegal smuggling as gold will be easily available here," said Suresh Kumar, Sri Sumangali Jewellers, Nungambakkam.

The new tax regime, with a focus on increased disposable income will also boost demand for jewellery as consumers will invest in asset creation, said Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers. "The changes brought in will also enhance the quality and global competitiveness of our organised jewellery sector, contributing to the industry's growth and India's continued economic prosperity," he added.