(MENAFN- Khaleej Times) Jewellers in India plan to tap a slice of the 20,000 metric tonnes of gold stashed at homes and temples to cut reliance on overseas purchases after the largest consumer curbed imports to bolster its currency.
The All India Gem and Jewellery Trade Federation, representing about 300,000 gold manufacturers and retailers, is asking members to offer incentives to lure holders to recycle their old jewellery for new ones, Chairman Haresh Soni said in an interview. Jewellers may offer incentives such as lower ornament making charges to promote scrap sales, he said.
Rising supplies of scrap gold may further reduce Indian imports that's forecast to tumble 22 per cent in the second half and deepen the 24 per cent losses in bullion this year. India doubled a tax on imports to eight per cent this year and tightened financing to reduce demand and contain a record current-account deficit that pushed the rupee to an all-time low against the dollar. Indians hold about 20,000 tonnes of gold, according to the World Gold Council.
Gold ticks up on steady dollar after Fed chief's remarks
LONDON - Gold edged up on Thursday, partially recovering from a more than one per cent loss in the previous session, as the dollar steadied in view of a possible slower pullback in the US Federal Reserve's stimulus programme.
The metal briefly rallied above crucial resistance at $1,300 an ounce after Bernanke's remarks on Wednesday, but gave up the gains as the dollar remained strong.
Gold rose 0.3 per cent to $1,278.56 by 0915GMT. It climbed to a three-week high of $1,300.16 in the previous session. US gold futures for August delivery were up $1.70 at $1,279.20 an ounce.
"There's some buying, although I wouldn't say the quantity is big. Gold hasn't really fallen a lot anyway," said a physical dealer in Singapore. - Reuters
"The old gold that is lying idle in the households should come in to the market," said Soni. "This will solve issues of shortage of raw material as well as reduce imports. We are having meetings with the jewellers and trying to convince them and this will have a positive impact on the economy."
Consumption in India, which imports almost all the bullion it needs, accounted for 20 per cent of global demand in 2012, according to data from the gold council. Imports may drop 22 per cent to 372.5 tonnes in the six months through December from a year earlier, according to a Bloomberg survey. Full-year imports may climb to about 902 tonnes from 860 tonnes in 2012 after a surge in purchases in April and May, according to Bloomberg calculations based on data from the council and the federation.
The jewellers have already suspended sales of coins and bars to retail buyers until the current-account deficit stabilises. Imports can be cut as much as 35 per cent if the jewellers also succeeded in tapping the idle gold, Soni said.
"It's certainly a good step and will reduce gold imports to some extent," said Sugandha Sachdeva, an associate vice president in charge of metals, energy and currency research at Religare Commodities Ltd. "Indians have a fascination for gold and if prices fall further they will purchase more."
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