2000rs withdrawal: The central bank’s move to replace Rs 2,000 notes with lower denomination ones has caused a slight rise in jewelry sales in India.
Although the demand this time is not as high as in 2016, when Rs 500 and Rs 1,000 notes were taken out of circulation, the government’s guidelines still require customers to submit Know Your Customer (KYC) details for transactions above Rs 50,000 and PAN card above Rs 2 lakh.
On Monday, gold prices rose by Rs 485 per 10 grams, reaching Rs 60,760. This increase in prices has not had a major impact on gold sales in Mumbai, as most customers prefer digital modes of payment. As the wedding season is in full swing, there has been some increase in customers at jewelry stores; however, only a few of them have paid in cash.
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2000rs withdrawal Effect in Gold:
Due to the high cost of gold at over Rs 60,000, some customers are trying to flush out their Rs 2,000 notes to purchase jewelry for family events. The 2016 demonetization exercise sparked panic buying of gold, as the precious yellow metal offered a secure investment option for middle-class Indians. This time, however, the situation is different and jewelers have denied reports of customers paying premiums for jewelry.
Additionally, the Financial Intelligence Unit of the government must be informed of transactions above Rs 10 lakh. Though the demand for gold this time is not as high as in 2016, there has been a slight increase in customers at jewelry stores in India. As gold prices continue to rise, it remains to be seen if the situation changes soon.