In a recent development, the Director General of Foreign Trade (DGFT) has announced restrictions on the import of specific categories of gold jewellery, as per a notification released by the foreign trade body on June 11.
The restricted import categories encompass gold jewellery adorned with pearls, diamonds falling under two designated categories of heading, gold embellished with other precious and semi-precious stones, and gold parts.
These restrictions are set to apply to imports of the aforementioned jewellery types from all nations, with an exception for the United Arab Emirates (UAE) under the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE, as outlined in the DGFT notification.
Analysts attribute DGFT’s decision to factors such as a sudden surge in imports from countries like Tanzania and Indonesia, which have been distorting the market dynamics.
The move comes amid fluctuations in gold prices, with recent pressures stemming from investors awaiting the US May inflation report and insights from the Federal Reserve’s policy announcement regarding potential interest rate adjustments.
As of 0541 GMT, spot gold remained relatively stable at $2,312.69 per ounce, while US gold futures saw a marginal increase of 0.1 percent to $2,329.3.
Market observers are keenly anticipating the release of US consumer price index figures at 1230 GMT, coinciding with the conclusion of the Fed’s two-day policy meeting, to gauge the inflationary landscape.
Last week, buoyant US employment data combined with reports indicating a pause in gold purchases by China’s central bank triggered the most significant daily drop in bullion prices since November 2020.
Nevertheless, despite gold prices hovering near record highs reached in May, demand for the precious metal in Asia continues to surge, as affirmed by industry insiders.
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