The gems and jewellery sector awaits Union Budget 2024
As the gems and jewellery sector eagerly anticipates Union Budget 2024, industry players are looking to Finance Minister Nirmala Sitharaman for potential tax reductions on exports. These reductions are hoped to boost demand for Indian-made gold and diamond jewellery in the global market.
Export Tax Relief
Industry players in the gems and jewellery sector are calling for a decrease in taxes on exports to enhance the competitiveness of Indian jewellery globally. The sector is pushing for a reduction in the tax rate from 15% to 10%, making Indian jewellery more appealing to international buyers.
Import Duty Cut on Gold
Alongside tax reductions on exports, jewellers are also seeking an import duty cut on gold from 15% to 10%. This reduction would make gold more affordable for buyers, leading to increased demand and sales. Additionally, lowering the import duty would help reduce the premium on gold prices in India, aligning them more closely with the international market.
Industry Expectations
A spokesperson for the All India Gem and Jewellery Domestic Council (GJF) highlighted the significant potential benefits of tax reductions on exports and import duty cuts on gold. These measures are expected to drive demand, boost exports, and improve the competitiveness of Indian jewellery on the global stage.
Short-Term Technical Analysis
Current gold prices on COMEX have established a strong support level at $2,300 in the short-term charts. The 26-day Exponential Moving Average (EMA) supports this level, suggesting a potential upmove towards $2,500-2,550.
Federal Reserve Rate Cut Expectations
Market expectations 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 anticipation has enhanced gold’s appeal as a safe-haven asset.
Dollar Resistance and Support
The US Dollar is facing strong resistance at $105 and support at $102.60. Gold is likely to benefit from the dollar’s range-bound movement, capitalizing on its weakness.
Fundamental and Technical Outlook
The overall outlook for gold remains positive, with buying opportunities presented by any dips. Both technically and fundamentally, gold’s uptrend seems secure, supported by a weakening dollar and the potential for a rate cut by the Federal Reserve.
Conclusion
With a strong technical setup and favorable fundamental factors, gold is poised for a potential upmove towards $2,500-2,550. Investors may consider using any dips as opportunities to join the gold rally, leveraging the market conditions.
**Additional Insight:**
The gems and jewellery sector plays a crucial role in India’s economy, contributing significantly to exports and employment. Tax reductions and duty cuts could further strengthen the industry’s position in the global market, attracting more buyers and boosting overall growth. Additionally, as global economic uncertainties persist, gold continues to be a sought-after safe-haven asset for investors, further supporting its potential for an upward price movement.
