Gold gets cheaper ahead of Akshay Tritiya as tariff cut; check how much price fell in last one month

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Published: May 2, 2019 1:43:42 PM

Gold has become cheaper by 1% after the government lowered tariff value by $5 per ten grams, ahead of Akshay Tritiya, a Hindu festival on which people buy gold as it is considered auspicious. The government revises the tariff value on gold every fortnight. Last time the government had pared the tariff value in mid-March by $9 dollars to $417 per 10 grams. In February-end the tariff value on gold stood at $426 per 10 grams.

Gold gets cheaper with the lowering of tariff value on yellow metal by per gram

Gold has become cheaper by 1% after the government lowered tariff value by $5 per ten grams, ahead of Akshay Tritiya, a Hindu festival on which people buy gold as it is considered auspicious. The government revises the tariff value on gold every fortnight. Last time the government had pared the tariff value in mid-March by $9 dollars to $417 per 10 grams. In February-end the tariff value on gold stood at $426 per 10 grams.

“The global demand for gold has gone up by 7% in the first quarter (Jan-March). People of India have already seen the gold price at Rs 35,000 (per 10 gram) in the first two months. So, any reduction in price could provide a boost to the Indian demand in the second quarter,” Amit Sajeja, Associate Vice President, Motilal Oswal, told Financial Express Online.

In the last one month, the gold prices have already fallen to Rs 31,500 per 10 gram, so the consumers have already got benefited by the reduction in the yellow metal prices by around 2%. Now, with the further impact of 1% because of the revision of tariff value on gold, the consumers will benefit more.

Experts expect gold prices to further slide till June on account of appreciation in the rupee which was trading at Rs 69.47 against the US dollar in the early trade on Thursday. It opened weak at Rs 69.60 in the early morning trade. “We can see a further fall of around 2-2.5% in spot gold price internationally on account of a stronger dollar. The decrease in gold prices will be further beneficial to the consumers who will be able to afford the gold below Rs 31,000 per ten gram,” Sajeja added. However, he further said that the prices will bottom out after June and will start rising again in the second half. So the consumers should not expect much fall in the gold prices.

The yellow metal slid in yesterday’s trading session after the US Fed Chair turned down the possibility of any rate hikes in the year. Further, with the fall in oil prices and appreciation in the rupee, the gold plunged more on the domestic bourses.

“The SPDS Gold ETF has witnessed liquidation in entire April. So, Looking at the current scenario, we recommend to go short on every bounce in MCX Gold. MCX Gold June 31,400-31,310 supports & 31,620-31,700 resistances,” Jigar Trivedi, Fundamental Analyst – Commodities at Anand Rathi Securities, told Financial Express Online. “However, going ahead, as India will celebrate Akshay Tritiya, we don’t rule out the possibility of jewellery buying at current levels, so the downside seems limited,” Trivedi added.

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