‘Govt restriction fuelling illegal import of gold’

Director (jewellery) of the World Gold Council Vipin Sharma has urged the Centre to take a long-term and holistic view to ensure gold does not lose its lustre in the Indian market.
Sharma, who was in the city to launch a new bridal collection, said that import restrictions are fuelling illegal entry of the yellow metal into the country where demand continues to remain robust despite steep hike in price of the precious metal in the domestic market.
Sharma also expressed the need to strike a balance between consumer demand and the country’s economic reality. “Recent government schemes, like the option of monetizing personal gold reserves to help tackle the issue of the country’s current account deficit are good, but considering that gold is still the preferred form of investment for a lot of Indian families, there is a need for relook at the policies, because the present scheme of things is naturally encouraging its entry into India via the unofficial channels,” he said.
With more than 567 ton gold already traded in the first two quarters of the current year, Sharma said he expects the demand to remain strong even in the last quarter. “Compared to the same period in 2012, there has been an increase in the demand this year, a trend which came in the wake of a price correction which was seen in the months of April and May this year. With the onset of the festive and wedding season, we expect the gold market to remain just as robust,” he said, citing a recent study done by the WGC which found that among 13,000 people surveyed across the country, more than 50% bought gold during the wedding season.
Sharma also pointed at a shift in the buying trend. “While the demand for the traditional designs remains constant, we are now seeing more and more buyers going for easy-to-wear everyday jewellery in contemporary styles which need not remain confined to bank lockers. Newly-crafted styles – which offer the flexibility of breaking down a single big piece of jewellery into smaller ones for regular use, are also much in demand, as are those which use a combination of precious stones and pearls with gold, pendant sets, statement pieces etc,” he said.
The increased prices of gold mean the metal has to work that much harder to continue to find favour among buyers, which has reflected in the changing styles that are being demanded, Sharma said.
According to Sharma, Maharashtra continues to remain a major market for gold. “Pune is a very interesting market, which has a couple of very strong regional chains. The demand in the smaller towns, and even the rural areas is increasing. While gold consumers in Pune remain rooted in traditional designs, there is an equally big market for modern styles which offer value for money,” he said.
Gold facts
In 2013 (Jan-June), 567 ton gold was purchased in India, up from 383 ton in the same period in 2012
India and China together account for more than 55% of the global gold consumption, which totalled 864 ton in 2012. The US too has registered an increase in demand in the last 2-3 years
In India, 50% of gold purchases happen during the wedding season
The annual gold market in India has been in the excess of 700 ton over the last 7-8 years, despite gold price rising from an average of Rs 5,500 per 10g in 2004 to more than Rs 28,000 per 10g in 2013
Gold worth Rs 247 thousand crore was sold in the country in 2012, up 6% from 2011
Gold trends
Light-weight pieces in contemporary designs
Pendant sets
Statement pieces
Bead-based designs (e.g. gold shaped into ghunghroos)
Textured surfaces
Combination pieces using coloured and precious stones and pearls with gold
Enamelling techniques
Use of classic motifs like leaves, flower petals, peacock designs
Flexible and detachable styles that allow big pieces to be used as smaller separates.
Source: indiatimes

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