India, the second largest consumer of gold jewelry, reduced the import tax on gold from 15% to 6% in July, leading to a substantial increase in purchases of gold jewelry, bars, and coins. This move caused a spike in local imports, propelling gold prices to new heights.
Investors turned to gold as a safe haven investment amidst economic uncertainty and turmoil in regions like Ukraine and the Middle East. The Federal Reserve’s 50 basis point interest rate cut also contributed to the surge in gold prices.
In addition, silver prices also experienced a significant increase, reaching its highest price since 2012. India’s resurgence in demand for gold, driven by the festive season and favorable economic conditions, has reignited excitement in the market.
Overall, the global demand for gold remains strong, with India leading the way in stimulating demand through strategic tax cuts and favorable market conditions.