As a pleasant coincidence, on the day the MCX- BusinessLine Bullion Conclave was scheduled in Thrissur, the Centre raised the ceiling up to which consumers can buy gold without producing their PAN card from ₹50,000 to ₹2 lakh.

The liberalisation of rules follows concerns raised by jewellers, and the increase in value is expected to boost gold sales and overall sentiments in the trade, said speakers at a panel discussion on the ‘Changing Dynamics of Bullion Markets in India — Outlook, Risks and Opportunities’.

Also read: New limit for reporting gold transactions soon: Govt

Hailing the government’s decision, B Girirajan, patron, All Kerala Gold and Silver Merchants Association, said the government’s move to exempt jewellery dealers from the purview of reporting provisions under the PMLA (Prevention of Money Laundering Act) will also be a “positive factor” for the industry.

GST, according to him, will enable the gold industry receive the 3 per cent input credit for gold bars. Coupled with the increase in the per-gram price of gold in the grey market by ₹50-70, this will help organised players ring in more sales, he added.

However, PM Thomas, President, Thrissur District Gold and Silver Merchants Association, pointed out that the restrictions on payments after demonetisation had resulted in sluggish sales, impacting both medium and small traders. There has been a major shift of consumers to malls and leading jewellery outlets. Besides, consumer interest in gold exchange has diminished due to higher prices of the yellow metal, he said.

Varghese Alukka, Managing Director, Jos Alukkas Jewellers, was of the view that the company’s marketing strategy of launching 916 purity gold and buy-back guarantee had good traction among consumers, and facilitated its expansion in other South Indian markets.

Highlighting the dynamics of the gold market, G Chandrashekhar, commodities market specialist, said economic growth, the geo-political situation, monetary policy, currency and flow of speculative capital were major determinants of the price of gold.

Gold is a safe haven asset and a hedge against inflation. The global gold market has been more volatile since 2014, and this calls for adoption of hedging strategies by actual users, such as jewellers, he said.

Increased credit availability According to Nisha Menon, Director, Tax, PwC India, the biggest advantage of GST for jewellers is their ability to utilise credit on various procurements, such as rentals of showrooms, sponsorships, security services, etc. The benefit of the increased availability of credit is expected to be passed on to the consumer.

Shivanshu Mehta, Head, Bullion, MCX, said the exchange is planning to organise campaigns across the country to educate and create awareness on the benefits of options trading in gold.

Rajalakshmi Nirmal, Deputy Editor, BusinessLine , was the moderator at the panel discussion.

It was pointed out by many speakers that Thrissur is the gold capital of the country. Out of the 1,000 kg of gold sold in Kerala, 70 per cent of ornaments are made by artisans and decades-old family-run businesses in Thrissur.

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