Gold prices zoom even as jewellers strike

FinMin considering their demand to replace higher import duty and remove excise, claim jewellers

Gold price opened today in Mumbai 1.3% higher at Rs 29,195 per 10 gram for 995 purity gold which is highest after 14 May 2014. Prices in domestic market zoomed following spurt in international price which is trading at $1,262 per ounce, near its recent high. However jewellers in the country are on strike which has entered last day.

In the Union Budget 2016, Finance Minister proposed 1% excise duty on jewellery making which jewellers across country are opposing with one voice and have downed shutters since Wednesday. They have proposed government to increase import duty of gold by 1% to 11% and remove excise. The proposal was a compromise formula for removing excise and the 'inspector raj'.

 

Official spokesperson of the India Bullion and Jewellers Association (IBJA) today said there is hope for review of excise. However till that happens strike will continue.

He said in a statement that, "Mohit Kamboj, IBJA President met Finance Minstry and informed that government is considering IBJA proposal of roll-back of excise duty and increasing custom duty. IBJA has told Finance Ministry that till the excise is rolled back or assurance of a roll-back is given, strike will not be called off and all-India gems and jewellery industry will we be on an indefinite strike till it is done."

Gold closes a 20-month high

Standard gold today closed at 22 month high of Rs.29,300 per 10 gram. It is highest after 15 May 2016 price of Rs 29,500.  The spurt in price is because of sharp increase in international price which has seen a high of $1,274.9, at India's evening time it was quoted at $1,263. 

Price is up 1.6% from yesterday. 

However at high price and due to jewellers strike bullion dealers are still quoting gold at a discount of $30 per ounce to cost of import and demand is virtually absent.