Hyderabad: Amid the threat of global recession and the possibility of the US central bank slowing down its tightening pace further, gold rates are hitting new highs in Hyderabad and other Indian cities.
At present, the rates of 24-carat and 22-carat gold in Hyderabad are Rs 57500 and Rs 52710 per 10 grams. It is likely to rise further in the upcoming days.
As per market experts, the rates in India are likely to touch Rs 60000 per 10 grams.
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Reasons for rise in gold rates in Hyderabad, other cities
One of the major reasons for the rise in gold rates is the threat of recession which is being predicted by many experts ever since Russia invaded Ukraine in February 2022.
However, the sudden spike in gold rates across the world can be attributed to the anticipated US Fed rate hike of 25 basis points (bps) which is less than the 50 bps that was hiked last month.
The slowing down in tightening pace by US Fed will make interest-bearing assets less preferable investment option. It pushes investors to prefer gold.
Due to these global reasons, the gold rates in Hyderabad and other Indian cities are witnessing hikes. The surge in rates resulted in a 25 percent drop in gold jewellery consumption.
US dollar, UK pound, Saudi riyal, Dirham, Aus dollar to INR exchange rates
Indian govt likely to slash import duty on gold
In order to make gold affordable and to help jewellery industry to survive amid a fall in gold consumption due to surge in rates, the Indian government is likely to slash the import duty.
Apart from making the gold rates cheaper in Hyderabad and other Indian cities ahead of demand season, it will also help in curbing smuggling.
It is expected that in the upcoming union budget, the central government will announce a cut in import duty on gold which is currently 15 percent.
Hyderabad and other Indian cities will see a drop in gold rates if government cuts import duty on the yellow metal, otherwise, they are likely to rise further.