A day after the RBI eased gold import norms, the price of 22-carat gold dropped by ₹780 per 10 gm to ₹27,690, while pure gold (24 carat) was down by a similar amount to ₹27,840.
The industry expects the downtrend in gold prices to continue with the rupee strengthening against the dollar and the new government expected to take some business-friendly measures.
On Thursday, the RBI allowed Star Trading Houses and Premier Trading Houses to import gold under the 80:20 scheme. The development is expected to wipe out the spot premium of ₹1.5 lakh charged per kg of gold as supply constraints ease, said traders, who added that the Government is also expected to bring down the import duty to 4 per cent, from 10 per cent, to curb smuggling.
Somasundaram, Managing Director, World Gold Council (India), said the RBI move is expected to increase the official supply of gold as a wider range of entities with import entitlement would now re-enter the market. However, the 80:20 scheme still continues and it may be a dampener, he said.
The drop in prices is the sharpest in a single day since August 2013, when the Government introduced the 80:20 rule. The regulation allows nominated agencies to import the precious metal on the condition that 20 per cent of the imports will be exported, and only banks were allowed to import gold.