On Thursday, India Bullion & Jewellers Association (IBJA) said that gold prices are likely to fall to Rs. 23,000-24,000 per 10 grams by Diwali as it also expects the customs duty reduction in the forthcoming budget, as following the 20:80 gold import norms by the Reserve Bank.
BJA president Mohit Khamboj told reporters in Mumbai, "RBI's easing of 20:80 gold import norms is positive for the gems and jewellery industry. We expect this will be followed by reduction of the Customs duty to 4-5 per cent from the current 10 per cent in the forthcoming Budget, resulting in declining of gold prices and (price) is likely to be at Rs. 23,000-24,000 by Diwali."
The yellow metal is likely to be on par with the global prices as the premiums will also go down due to the positive steps taken by the government, he said, "It will also reduce the gold inflow through the grey market."
On Wednesday the RBI eased gold import norms by allowing select trading houses, in addition to some banks, to procure the precious metal to boost exports.
The apex bank had imposed severe restrictions on gold imports to check burgeoning current account deficit and depreciating rupee in July 2013.
Under the 20:80 scheme, an importer has to ensure that at least one-fifth, or 20 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.
The gold price in the market dropped by 3 per cent, i.e, Rs. 800 to Rs. 28,100 per 10 grams on Thursday, which is the lowest price since August.