Gold rates are reaching new highs in Hyderabad and other Indian cities, in the midst of the threat of a global recession and the possibility of the US central bank slowing its tightening pace further.
The current rates for 24-carat and 22-carat gold in Hyderabad are Rs 57500 and Rs 52710 per 10 grams. It is expected to rise even further in the coming days.
According to market experts, rates in India are likely to reach Rs 60000 per 10 grams.
Reasons behind rise in gold rates in Hyderabad, other cities
One of the major reasons for the rise in gold prices is the threat of a recession, which many experts have predicted since Russia invaded Ukraine in February 2022.
The unexpected rise in gold prices around the world, on the other hand, can be attributed to the anticipated US Fed rate hike of 25 basis points (bps), which is less than the 50 bps hiked last month.
The slowing down in tightening pace by US Fed will make interest-bearing assets a less appealing investment option. It encourages investors to prefer gold.
Gold prices in Hyderabad and other Indian cities are rising as a result of these global factors. The rate increase resulted in a 25% drop in gold jewellery consumption.
Indian govt likely to slash import duty on gold
To make gold more affordable and to assist the jewellery industry in surviving amid a drop in gold consumption due to rate increases, the Indian government is likely to slash the import duty.
Apart from lowering gold prices in Hyderabad and other Indian cities ahead of the demand season, it will also help to reduce smuggling.
There is a possibility that in the upcoming union budget, the central government will announce a cut in import duty on gold which is currently 15 percent.
Gold prices in Hyderabad and other Indian cities will drop if the government cuts import duty on the yellow metal; otherwise, prices will rise further.
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