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Gold importers put overseas purchases on hold
The hike in customs duty on imports of gold in the union budget for 1998-99 coupled with lean demand period has prompted the importers of gold to put overseas purchases on hold. The landing cost of gold after increase of customs duty from Rs 220 to Rs 250 per 10 gm has brought down the margins between domestic and international prices. The customs duty increase on gold is bound to boost the prices in the domestic market, they said, adding the real effect will be seen once the marriage season demand picks up in the next couple of months. However, the impact of any upturn in the international price would not be severe as prices of precious metal have been sluggish for the last few weeks. Prices after touching a six month high of $ 314 per troy ounce earlier, dropped to $ 288 per troy ounce. The increase of Rs 30 per 10 gm of gold will always be taken into account for settling the domestic price even in the falling market conditions, a jeweller said. The gold jewellery exporters in the export promotion zone areas will not be affected with this increase as they do not pay
customs duty.