Gold Rates in Karnataka Increasing Amid Global Economic Turmoil
Gold Rates in Karnataka, India are keeping pace with the global trends, with gold 22K and gold 24K trading for Rs. 23,520 and Rs.24,696 respectively due to the high demand from local jewelers. Sovereign prices did not budge, however, trading at a flat rate of Rs. 25,000 per 8 grams.
The younger generation in India hasn’t shown as much interest in gold as their older counterparts did. Fading interest in the bullion pushed prices on a downward trajectory. Many jewelers in Karnataka have been luring customers by promises of large discounts, in some cases also resorting to freebies to cast the widest net possible.
Dwindling interest in gold is also supported by a large decline in the number of marriages that took place in the year 2018. Usually, marriage seasons are the most festive occasions for families to splurge their wealth on gold. This tradition has changed in recent years, on account of the younger generation moving on to different asset classes such as the stock market and fixed deposits.
But the growing economic inflation due to the US Federal Reserve’s interest rate hikes might change that. Investors are finding gold to be more attractive because of its appeal as a hedge against geopolitical and economic tensions.
The local Indian government is reported to have been working on creating a new ‘integrated’ policy on gold which, sources say, is going to be announced very soon. The new policy is set to promote the development of the precious metals industry and possibly increase India’s export market to other countries.
Suresh Prabhu, the Commerce and Industry Minister in India said the following to media outlets, “We are pushing for it (gold policies) as we need an integrated policy. In the next few days, we will have a meeting of all concerned people to frame the policy on an expeditious basis. We are looking at all elements of gold in the policy.”
According to a report released by Niti Aayog, the government should reduce import taxes on gold that currently stand at 10 percent and also slash the GST rate on precious metals from 3 percent. In addition, the report published by the government think tank suggests setting up bullion exchanges and a gold board to put power back into the hands of the local domestic jewellery industry.
The Gem and Jewelry Export Promotion Council (GJEPC) wants the government to increase more incentives for gold by tapping into the Merchandise Exports from India Scheme (MEIS). Under the new scheme, the government will provide duty benefits based on the merits of the country and product.
Gold has been traditionally used by Karnataka businessmen to hide their ill-gotten gains or to evade taxes. India has the largest market for gold but imports a large percentage of it because its mining industry is still in its infancy thanks to policies such as the MMDR Amendment Act, 2015 that discourage gold exploration by private institutions. According to the MMDR Amendment Act, the burden of mineral discovery lies solely with the government, with control being given to the private miner after they go through a difficult e-auction process.
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