For Indian gold buyers looking for bargains ahead of the main wedding season, the scrapping of curbs on imports last week couldn’t have come at a better time.
“I’m very happy that I’m able to get more gold within my budget,” said Sunita Jain, 55, a housewife whose son is getting married this month. “Prices have fallen and may fall even more,” she said while checking out jewelry stores in Mumbai’s Zaveri Bazaar.
The Reserve Bank of India on Nov. 28 unexpectedly removed rules requiring importers to sell 20 percent of their shipments to jewelers for re-export. The end of the regulation, which limited buying since its introduction in July last year, will reduce smuggling and return domestic demand to normal levels of about 800 metric tons to 900 tons annually, the Indian Bullion and Jewellers Association Ltd. estimates.
“This was the trigger to get wedding demand going,” said Kumar Jain, owner of jewelry retailer U.T. Zaveri in Mumbai. “The shops are crowded now. This move will remove the monopoly enjoyed by the bigger traders and allow more supplies to smaller jewelers.”
An average of about 5 million weddings every year fuel demand for gold in India, according to Prithviraj Kothari, managing director of Riddhisiddhi Bullions Ltd. in Mumbai. He estimates average purchases for a wedding at about 200 grams. The main marriage season runs from November through May. Bullion is bought for weddings as part of the bridal trousseau and gifts. Demand also climbs during the festival season that runs from late August to October.
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