Indian Gold Demand Up in September Even With Tax Rule

Jon Economy, Gold, Government, Market Commentary, Precious Metals

After nearly tripling in August, demand for gold in India remained strong last month, despite a tax rule that put a damper on high-dollar jewelry purchases.
Gold demand rose 31% year-on-year in September. Imports came in at 48 tons, according to a Reuters report.
Higher purchases by India, the world’s second-biggest consumer, could lend support to global prices that are trading near their highest level in a week. The higher imports may also widen the South Asian country’s trade deficit.’
Continued strong demand in India was something of a surprise. It was fighting headwinds caused by a tax rule that went into effect back in August. The government included Indian jewelers under the Prevention of Money-Laundering Act. The rules increased compliance requirements for high-dollar jewelry purchases. Buyers had to provide their income tax identity for transactions above 50,000 rupees ($766). Analysts said the requirements were hindering high-value deals.

This post was published at Schiffgold on OCTOBER 10, 2017.