Dhanteras 2017: Gold sales likely to remain buoyant despite GST hiccups

New Delhi: Jewellers are bracing for the festive season and the trend is looking better due to the government decision on the Prevention of Money-laundering Act (PMLA) and stability in the prices of the precious metal.

India is celebrating Dhanteras on Tuesday, the day when buying gold is considered auspicious.

Gold prices are currently hovering at Rs 30,850 per 10 grams at the bullion market in Delhi on the occasion of Dhanteras while last year the precious metal stood at Rs 30,590 per 10 grams.

"However, the sentiment is not at its full potential. After GST was implemented (in July) it brought in its own share of challenges, which will be there for some time," World Gold Council Managing Director, India, Somasundaram PR told PTI.

GST was not adopted properly and putting gold and silver imports from South Korea in restricted list also caused disruptions in the market, Somasundaram said.

"However, I would say demand will still go up and touch the level achieved last year," he added.

Gold prices in India traded at a premium this week for the first time in more than three months after a spurt in purchases.

India Bullion and Jewellers Association (IBJA) Director Saurabh Gadgil told PTI that the market sentiment is improving but it has not yet become buoyant.

"If the overall business remains same as the last year or goes marginally up by 5 percent, we will be very happy," added Gadgil, who is also PNG Jewellers Chairman and Managing Director.

Echoing a similar view, All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal said there has been some relief for the maker players due to the government decision on the PMLA.

However, due to less currency in the market the overall sentiment is dull, he said.

"The momentum has started, but it is yet to pick up. There is less currency circulating in the market as an aftereffect of demonetisation announced last year. Because of this, there have been less buyers this year during Dhanteras and Diwali," he added.

In a relief to the industry, the government has removed gems and jewellery dealers from the purview of the reporting requirement under the PMLA.

Early this month, the government rolled back August 23 notification that notified dealers in precious metals, precious stones and other high value goods as persons carrying on designated business and professions under the Act.