Gold Imports Defy Tariff Hikes, Sustain Momentum in 2024

Gold imports are anticipated to maintain their momentum throughout 2024, defying the impact of elevated tariffs. Somasundaram PR, Regional CEO of the World Gold Council India, sheds light on the market dynamics indicating a sustained demand for gold, even as prices soar above Rs 60,000 per 10 grams. Despite the recent imposition of higher tariffs, the prospect of increased market acceptance for these elevated price levels suggests a continued uptick in gold imports for the foreseeable future.

In an interview with Priyansh Verma, Somasundaram emphasized the resilience of gold demand in the face of economic fluctuations. He pointed out that the market’s willingness to embrace higher price points reflects a shift in consumer sentiment, indicating a robust appetite for gold as an investment and adornment.

While tariffs have risen, they have not deterred consumers from seeking out gold, which has long been revered in Indian culture. Somasundaram attributes this enduring demand to the intrinsic value of gold as a tangible asset and a hedge against economic uncertainty. Despite fluctuations in prices and policy changes, gold remains a steadfast cornerstone of India’s economic landscape.

Moreover, Somasundaram highlighted the role of income growth as a key determinant of gold demand. He noted that historically, a 1% increase in income has corresponded to a 0.9% increase in the demand for gold over the long term. This underscores the symbiotic relationship between economic prosperity and gold consumption, with rising incomes fueling the appetite for precious metals.

In light of these factors, the outlook for gold imports in 2024 remains optimistic, with sustained demand expected to outweigh the impact of tariff adjustments. As India continues to navigate economic challenges and opportunities, gold is poised to retain its allure as a timeless symbol of wealth and stability.

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