Gold coins are not bought for investment but are rather seen as shagun and given as gifts. So we have decided to temporarily lift the ban on sale of gold coins for Dhanteras and Diwali, said Ashok Minawala, board member at the All-India Gems and Jewellery Trade Federation.
The federation, which represents over three lakh players including jewellery retailers, manufacturers, wholesalers and exporters, had in July asked its member jewellers not sell gold coins and bars to help contain the current account deficit (CAD).
However, jewellers are now convinced they can go back to selling gold coins.
Gold coins and bars account for about up to 20 per cent of all gold sales in the country by jewellers.
Though there are no official data, but industry estimates peg the market for gold coins and bullion at 300 tonne annually. Finance ministry officials told The Indian Express they will track the spike in sales of gold. There could be some higher demand for gold due to Diwali and the marriage season. We are keeping a watch on it.
Public sector banks too had been directed by the Reserve Bank of India to stop selling gold coins as demand for the precious metal was putting pressure on the current account deficit (CAD) that touched 4.8 per cent of the GDP in 2012-13. But that ban is unlikely to be rescinded soon.
India is the largest importer of gold in the world. The country imported $830 tonne of the metal last fiscal. But since then, similar curbs including a higher import duty of 10 per cent on the metal have brought down gold imports to a mere 7.24 tonne in September from a record 162 tonne in May this year.
Analysts too have been expecting a pick up in gold demand due to festivals and the wedding season.
The World Gold Council has predicted a 15 per cent rise in gold demand this quarter to about 300 tonne due to good monsoon and 20 per cent more auspicious days this festival season.