India’s Gold Industry Loses its Sparkle

The average world gold price has fallen by 20 percent year-on-year in the third quarter, to US$1,326 per ounce from US$1,652 in October 2012. Prices have been declining in each quarter of 2013. But not in India. Grappling with a high trade deficit and a weak rupee, India imposed a series of measures earlier this year to crimp demand for the metal – the second biggest item on its import bill after oil. It introduced a record 10 percent duty on gold imports and tied the volume of imports to exports, making it more difficult and expensive for gold to be sold to domestic markets. Imports shriveled from a record 162 tonnes in May to 24 tonnes in October.

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