To the chagrin of the gem & jewelry industry in the county, the Indian government last Friday (July 5) announced it would increase the import duty on gold and precious metals to 12.5% from current level of 10%. The move will raise the price of gold, silver and other precious metals on the domestic market, with concerns that smuggling may rise and tourists may seek to purchase their gold elsewhere. India is one of the largest gold importers in the world, arising mainly from demand from the jewelry sector. India imported gold worth $32.8 billion during 2018-19.
The world’s largest coloured gemstone producer, Gemfields, yesterday announced it has established a joint venture with Mwiriti to explore for gold and assorted minerals in Mozambique. Mwiriti is Gemfields’ existing partner in Montepuez Ruby Mining (MRM) and holds 12 greenfield licences located as little as 20 kilometres from MRM’s existing operations, including an extension of the known Montepuez ruby belt with both secondary gold incidence and primary corundum mineralisation having been observed.
The gold price reached a six-year high on Friday, June 21, hitting $1,410 at its peak as investors sought a safe haven in amid troubled global waters and announcements by the European Central Bank and the Federal Reserve saying they are leaving the door open to interest-rate cuts this year. A lower interest rate in combination with a weakening dollar has historically always made gold an interesting investment. Now that bonds are yielding less, equities seem to have reached an apex and raw materials and currencies are now worth less, gold has become more attractive.
Global demand for gold jewelry rose 1% in Q1 2019 to 530.3 tonnes, driven by the Indian market, writes World Gold Council (WGC). A lower local rupee gold price in late February and early March coincided with the wedding season, which is the traditional time for significant gold purchases, lifting jewelry demand in India 5% higher than the same period last year. The 125.4 tonnes purchased makes last Q1 2019 the highest Q1 since 2015.
Billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates, a Reuters analysis has found. In a devastating exclusive report (and video), authors David Lewis, Ryan McNeill and Zandi Shabalala write that customs data shows the UAE imported $15.1 billion worth of gold from Africa in 2016, more than any other country and up from $1.3 billion in 2006, but much of the gold was not recorded in the exports of African states.
The United Arab Emirates (UAE) Cabinet has announced that it is reversing the 5 percent value added tax (VAT) for investors in gold, diamond and precious metals at the wholesale level. Doing so will “contribute to stabilising the gold and diamond sector in the UAE as well as stimulating investment in this sector”, a statement said following the Cabinet decision. The move, which goes into effect immediately, is expected to ease the pressure on gold and diamond traders in the country. Retailers will continue to impose 5 percent on all jewelry transactions taking place at their shops.
Government authorities in Tanzania have seized a shipment of diamonds belonging to London-based Petra Diamonds, saying the miner under-declared the value of its mineral exports. On August 31, customs seized a parcel containing 71,654 carats rough gems at the Dar Es Salam airport as they were being exported to Antwerp by Williamson Diamonds, in which Petra holds a 75% stake and the Tanzanian State 25%.
"Those 238 grams are believed to be the most rigorously documented export of small-scale gold in history", writes The Globe and Mail. They are referring to 238 grams of gold that Canadian NGO Partnership Africa Canada (PAC) purchased from small-scale mining sites in eastern Congo as part of a pioneering new system of gold exports called "Just Gold", initiated to generate a new form of highly detailed sourcing data.
India's exports of cut and polished diamonds in May increased 3.67% year-over-year to US$2.05 billion from US$1.98 bn in the same month a year earlier, according to provisional data released by The Gem & Jewellery Export Promotion Council (GJEPC). For the fiscal year to date (April-May 2017), polished exports are up a single percentage point at US$3.8 billion. Rough imports during the month were up 22.5% in value terms at US$1.86 billion compared to US$1.52 billion imported during the previous May. Rough imports have increased 5% for the first two months of the year.
Much to the relief of the gold jewelry and diamond processing industry, the government has made some changes to the previously announced goods and services tax (GST) rate structure, slashing the applicable rate from 18% to 5% for certain categories of goods and services - and importantly, manufacturing - related to the gem and jewelry industry. The Council’s earlier decision of 18% was met with much discontent among jewelry manufacturers, who called it impractical and likely to cause immense job losses, as well as increasing the burden on the end consumer. The new tax kicks in from July 1.
Dubai has imposed a 5% import duty (from 0.36%) on gold and diamond jewelry as of January 2017, opening the debate on who will win or lose: India's exporters of said jewelry, or their domestic market purveyors and consumers; local manufacturers in Dubai, or their exporters of Indian gold and diamond items? The Economic Times frames the debate as follows: "Dubai has imposed a 5% import duty on gold and diamond jewellery, a move which is likely to hurt Indian exports at a time when demonetisation has hit business at home.
Chow Tai Fook Jewellery Group Ltd., which operates over 2,300 shops in more than 500 cities, indicated strong sequential growth over Q2 2016 after experiencing substantial declines during the past two years amid a slowdown in China's economy and fewer tourist arrivals in Hong Kong.
Gold sales jumped 30-50% on Dhanteras - the first day of the Diwali festival, when people traditionally buy gold or silver jewelry - as the metal’s price stabilised below its peak, according to Business Standard. Retailers witnessed a surge in demand for coins and ornaments. Gold prices are now around 16% higher than last Diwali, although gold prices on Dhanteras day had softened as compared to the last few months. One of the major trends this year is that antique or traditional gold jewelry is back in demand. Diamond jewellery saw brisk sales this year as well across the country.
Gold is heading for the first monthly decline since May as investors price in the prospect of higher U.S. borrowing costs by the end of the year and slowing purchases of bullion-backed exchange-traded funds. Bullion for immediate delivery is at around $1,315 an ounce but dropped to $1,309 on Tuesday, the lowest level since June 28, and is down 2.7 percent this month, Bloomberg reported.
Record high prices for gold (the price of gold rose 25% in the first half of 2016, its strongest performance in 35 years) has led to a record surge in H1 investment demand of 1,063.9t, which was 16% higher than the previous H1 high from 2009, as continued growth in Q2 2016 (+15%) brought total H1 gold demand to 2,335t - the second highest first half on record, according to the World Gold Council.
Analysts are "scrambling to increase their gold price forecasts, as the gold price continues to rise," the World Gold Council (WGC) said in a statement. The price of gold has again passed the $1,360/oz for a second time in 2016, a level previously seen in early 2014. The gold price has increased by almost 29% in US dollar terms so far this year (as of August 2). This has been gold’s largest continuous gain since the European sovereign debt crisis in 2010 and 2011.
Indian mines secretary Balvinder Kumar has stated that India is seeking the participation of Rio Tinto and Anglo American's De Beers to explore for diamonds and gold, reports Reuters, a move it refers to as part of Prime Minister Narendra Modi's ambition to make the country a major mineral producer. Kumar said that the Indian government will start to auction the rights to up to 70 diamond and gold exploration zones to mining companies this year.
The U.S. consumer price index (CPI) for jewelry jumped by 3.3 percent in May from April, according to seasonally unadjusted data from the U.S. Bureau of Labor Statistics and soared 9.9 percent from a year earlier, according to Rapaport News. However, the sharp increase was not in line with diamond prices for the month, with Rapaport's diamond index showing that prices of 1-carat, GIA-graded diamonds were flat, while prices of 0.30-carat diamonds fell 1.1 percent and 0.50-carat diamonds slipped 0.3 percent during May.
Surat’s diamond sector is feeling more upbeat following the end of the national jewelers' strike and rising demand from China and the United States for polished goods. After picking up in January-February, trade again plummeted in March due to the nationwide jewelers' strike over a proposed new tax on gold that served to put a dent in domestic demand for diamonds, The Business Standard reported. Traders believe that a rise in domestic and international demand as well as the effect of the end of the strike will create a rise in business levels.
Reports from multiple sources are starting to detail the murky structures hiding the tremendous wealth accumulated by certain players in the diamond and gold trade that emerged through last week's release of the Panama Papers.
There was a 2.9% increase in jewelry prices in the United States last month, according to statistics from the Bureau of Labor Statistics which showed the rise in the consumer price index (CPI) for jewelry, reported Rapaport. The figure was 6.2% higher than a year before. The increase followed a rise in polished diamond prices in February, with the RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rising 0.3 percent. RAPI for 0.30-carat diamonds advanced 0.4 percent and RAPI for 0.50-carat diamonds added 0.7 percent.
Gold and jewelry markets across India re-opened on Monday after traders ended an 18-day strike that resulted in losses of hundreds of millions of dollars in revenue for businesses and taxes for the government. The strike was aimed at pressuring the government to reverse a 1% excise duty imposed on gold and diamond jewelry in the 2016-17 budget. Although the government has not yet announced the withdrawal of the planned excise tax, which could make gold and diamond jewelry more expensive, it has decided to set up a task force led by an economic expert to look into it.
Despite an economic slowdown, the Indian luxury market, including high-end jewelry grew by 25% last year, reaching $15 billion, and recent studies in the country provide encouraging news for the future of the Indian luxury market which has seen many global players enter it in recent years. The luxury market is seen growing by 30-35% over the next three years.
India jewelers are estimated to be losing about $150 million a day in income from a shutdown protesting a proposed 1% tax enters its second week, the All India Gems & Jewellery Trade Federation told Bloomberg. Shops will stay closed until the government assures jewelers that a 1% duty proposal is withdrawn, said Bachhraj Bamalwa, a director at the federation, which represents 300,000 jewelers and bullion dealers across the country.
The Fairtrade Foundation reported that volume sales of Fairtrade gold jumped 440% in Britain last year. The foundation also said Fairtrade mining co-operatives in Latin America sold 170 kg of Fairtrade gold on the global market which generated a ‘Fairtrade premium’ of $340,000 on top of the selling price to invest in community projects, Jewellery Focus reports. In addition, the number of registered goldsmiths using Fairtrade gold in 11 markets rose to 389, with 142 being in Britain.
More than 300,000 jewelers across India are taking in a three-day strike starting today (Thursday) to protest against a proposed 1% excise duty on gold and diamond jewelry which they believe will severely impact sales of jewelry. In excess of 300 industry associations, including manufacturers, craftspeople and others, are participating. The proposed tax would be another burden on an industry already beset by challenges, said All India Gems and Jewellery Trade Federation (GJF) Chairman G V Sreedhar.
After three years in which the price of gold declined, the yellow metal saw a resurgence in 2016, and that is continuing this year so far.
The repercussions of budget changes affecting the Indian jewelry market have started to be felt with India’s biggest gold market closing down on Tuesday as jewelers in the country’s commercial capital began an indefinite strike to try to reverse a plan by Prime Minister Narendra Modi to introduce an excise tax. Jewelers in Mumbai’s Zaveri Bazaar stopped work and want the proposal for a 1% levy announced in Monday’s annual budget to be withdrawn, according to Ketan Shroff, a spokesman for the India Bullion and Jewellers Association Ltd., which has 10,000 members, Bloomberg reported.
The U.S. consumer price index (CPI) for jewelry rose by 6.7% on the month in January, according to the U.S. Bureau of Labor Statistics. The reading was 2.9% higher than a year ago, Rapaport reported. The rise in jewelry prices follows increases in polished diamond prices last month as a result of shortages. Rapaport said its proprietary price index had shown 1-carat, GIA-graded diamonds increasing by 0.9% during January, while 0.30-carat diamonds increased by 4.7% and 0.50-carat diamonds showed a price increase of 4.5%.
Demand for gold worldwide last year was almost flat on the year at 4,212 tonnes (t), according to the World Gold Council’s latest Gold Demand Trends report. Demand bounced back in the second half of 2015 due to sustained buying from central banks and a strong second half from China and India. This was clearly seen in the retail investment sector, with strong purchases of bars and coins by China, Europe and the US, as investors took advantage of weaker prices amid a worsening economic backdrop, financial turbulence and ongoing geopolitical tension.
The gold price hit an eight-month high overnight (Feb. 8-9), very close to $1,200 an ounce and establishing a new battleground that will determine whether the current rally turns into a prolonged upward trend, writes The Week. After three consecutive annual falls during a bull market for equities and, latterly, the apparent return to an increasing interest rates, some analysts have ditched earlier predictions for gold prices to drop further.
The founder of Cred Jewellery, Greg Valerio, has been awarded the MBE (Member of the British Empire) in the Queens New Years Honours list for 2016 for his work for Fairtrade Gold and with gold mining communities in South America and Africa. Valerio founded Cred Jewellery in 1996 to pioneer responsible mining practices in the jewelry industry. In 2003, Cred established the first transparent supply chain of gold and platinum from Oro Verde in Columbia, and was the first jewelry company to pay social premiums for ecological gold.
Gold took a hit to its image as a safe haven asset in 2015 with its longest decline since 1984. Bullion futures fell for a sixth-straight quarter in the final three months of last year, and lost 10 percent of its price in 2015 and have fallen by about 45 percent since reaching a record high in 2011. The price of gold has fallen as the U.S. dollar has surged on the back of rising American interest rates and a general collapse in prices of commodities from iron ore to oil.
For the first time in the Nobel Peace Prize’s history, the winners of this year’s award will be presented with a medal that is made out of Fairmined certified gold. The prize, featuring the head of Alfred Nobel, was struck at the Norway Mint in Kongsberg, Norway, ahead of the ceremony on December 10 where it will be presented to the Tunisian National Dialogue Quartet.
U.S. platinum jewelry imports surged 85 percent in the third quarter of 2015, gold jewelry imports were up 12 percent as prices for both precious metals fell for the fifth consecutive quarter, according to Thomson Reuters GFMS calculations. U.S. imports of gold jewelry were driven mainly by higher imports from India, Oman, Thailand and Turkey.
The World Gold Council's (WGC) Gold Demand Trends report shows demand for gold jewelry climbed 6 percent on the year in the third quarter of 2015 to 632 tons from 594 tons in the year-earlier quarter. Buyers in India, China, the United States and the Middle East bought more gold as the price of the yellow metal declined in July and August, the WGC said in its report.
Announced previously, Indian Prime Minister Narendra Modi has now officially launched three incentives to monetize gold that is lying idle and make it part of the banking system. The Gold Monetisation Scheme (GMS) 2015 will offer an option to resident Indians to deposit their precious metal and earn an interest of up to 2.5%, while under the Sovereign Gold Bond scheme, investors will be able to earn 2.75% interest per annum by buying paper gold.
India's Ministry of Commerce and Industry is expected to announce on November 3 the extension of incentives under the ‘Make in India’ initiative for the gem and jewelry sector. The short-term and medium-term initiatives include the establishment of Special Notified Zones (SNZ) for the sale of rough diamonds by mining companies, a reduction of net profit rates for the diamond industry to 2.5 percent from 6 percent, reductions in import duty on gold and silver to 2 percent from 10 percent, and zero percent for cut and polished colored gemstones from 2.5 percent among other measures.
Worldwide demand for gold during the third quarter rose 6.6 percent on the year to 1,074 tonnes, according to the GFMS Gold Survey: Q3 2015 Review and Outlook, a publication of Thomson Reuters. Jewelry making, which accounts for almost half of demand, declined slightly on the year, according to the publication, as “higher demand in India was offset by a slow recovery in Chinese offtake, although demand in the latter was not as bleak as in the first half."