Gold prices have plunged, tracking weak global trends amid a strong dollar and easing demand from local jewellers. Gold prices have plummeted a total of Rs 600 on Tuesday, July 9, 2019 and closed in the Commodity market at 1392.91USD. Whereas in the Indian markets, gold prices closed at Rs. 34,582 per ten grams on Tuesday.
This sharp fall can be said to happen due to weak trends globally. The dollar has gained strength against the rupee which can be attributed as another reason for the plunge. The demand from local jewelers has also eased; contributing to it.
The Union Budget announced on July 5, 2019 has proposed an increase in the customs duty on gold and other precious metals. The rate at its current level stands at 10% which will be revised to 12.5%. Industry experts feel that gold demand in India could be hit after the import duty hike and that could weigh on global prices.
Meanwhile a fall in global gold prices pushed domestic prices to record highs. As a result of the same, Titan Company announced that its revenue from jewellery segment had grown by a muted 13% in the first quarter as consumer demand in June was hit by a sharp increase in gold prices.
This news was followed by shares of Titan plunging by 12.3% on July 9, 2019. This fall is the highest single-day fall in the prices of the shares in over three years. Industry experts say that gold demand in India could be further hit after the import duty hike and that it could also weigh on global prices.
Jewellery contributes to almost a staggering 82% of the Titan Company’s revenue and the muted demand has worried officials. The slowdown and the weakness in the share price could persist until the demand for jewelry revives led by cheaper gold prices.