Indian Travel Restrictions Bring Down Gold Smuggling, Boost Legal Market
Indian gold prices hit a staggering Rs 49,045 per 10 grams on July 8.
Owing to the lack of international flights amidst the Coronavirus pandemic, the activities of illegal smuggling of gold in India have gone down considerably. This, in turn, has led to a boost in the legal gold market. Despite this, however, the prices of the precious metal haven’t shown any signs of coming down. On Wednesday (July 8), the price per 10 grams of gold hit a whopping Rs 49,045. Dealers who spoke on the condition of anonymity said that the reduced supply of smuggled gold had driven Indian spot prices to a premium this week for the first time this year, adding to bullish sentiment on the gold market.
The smuggling of gold has been increasing in India ever since the government, in 2013, raised the import tax to 10%. Moreover, 2019 saw the Modi government increasing it to 12.5%. “Smuggling can be expected to go down substantially in the current scenario. Smuggling logistics were also severely affected during the lockdown,” revealed Somasundaram P.R., head of the World Gold Council’s (WGC) Indian Operations. He said that he could not give figures, but he expects smuggled volumes this year would be significantly lower than the 115-120 tonnes of gold the WGC said was smuggled into India in 2019.
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