Budget 2024: Export tax relief, and import duty cut on gold among top demands from industry
Mon July 15 2024
The gems and jewellery sector is eagerly awaiting Union Budget 2024, to be presented by Finance Minister Nirmala Sitharaman. Industry players are hopeful for tax reductions on exports to bolster demand for Indian-made gold and diamond jewellery.
Export Tax Relief
The gems and jewellery sector is seeking a reduction in taxes on exports to boost the competitiveness of Indian-made jewellery in the global market. The industry is hoping for a decrease in the tax rate from 15% to 10%, which would make Indian jewellery more attractive to international buyers.
Import Duty Cut on Gold
Jewellers are also expecting an import duty cut on gold from 15% to 10%. This move would make gold cheaper for buyers, increasing demand and boosting sales. The reduction in import duty would also help to reduce the premium on gold prices in India, making it more competitive with international prices.
Industry Expectations
"The reduction in taxes on exports and import duty cut on gold would be a significant boost to the gems and jewellery sector," said a spokesperson for the All India Gem and Jewellery Domestic Council (GJF). "It would help to increase demand, boost exports, and make Indian jewellery more competitive in the global market."
Short-Term Technical Analysis
Gold prices on COMEX have established a strong support level at $2,300 on the short-term charts. The 26-day Exponential Moving Average (EMA) provids additional support, indicating a potential upmove towards $2,500-2,550.
Federal Reserve Rate Cut Expectations
The current prices have factored in a possible rate cut by the Federal Reserve in September, as the US CPI has been declining, meeting the Fed's criteria for a rate cut. This expectation has bolstered gold's appeal as a safe-haven asset.
Dollar Resistance and Support
The US Dollar faces strong resistance at $105 and support at $102.60. As long as the dollar remains range-bound, gold is likely to benefit from the weakness.
Fundamental and Technical Outlook
The broad trend for gold remains positive, with dips acting as buying opportunities. Both technically and fundamentally, the gold uptrend seems intact, supported by a weakening dollar and a potential rate cut by the Federal Reserve.
Conclusion
Gold is poised for a potential upmove towards $2,500-2,550, supported by a strong technical setup and favorable fundamental factors. Investors may view any dips as opportunities to buy into the gold rally.
Source: https://economictimes.indiatimes.com/