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Hallmarking centers gear up for gold monetisation scheme

Unlike traditional deposits, if you want to put your gold as deposit under the new gold monetisation scheme (GMS), bank will be the last place you would visit. First you will have to visit collecting and purity testing centres (CPTC), which are traditionally known as hallmarking centers. In the country, at the time of launch of the scheme on November 5, about 100 such centers would be ready for all required facilities and licence from the Bureau of Indian Standards. The success of the GMS depends upon infrastructure of these CPTCs. The government figures released earlier say there are 331 such centres but latest figure given by association of these centers Indian Association of Hallmarking Centers say it is 349.

“When the scheme will be launched before Diwali, 100 such centers would have been equipped with facilities required under the scheme with licence from Bureau of Indian Standards,” said K Anand Kumar, Secretary of the Indian Association of Hallmarking Centers. Currently, audits of these centers are being carried out by BIS and next week Karnataka based centers would be audited. For offering melting facilities many centers have to invest ` 4-5 lakh to create that facility for which the process in on. Four centers in Mumbai, 3 in Gujarat and 2 in Delhi have already been audited by the BIS. All 349 hallmarking centers are yet not approved by BIS to be eligible for the GMS.

Courtesy : Business Standard

RBI fixes public issue price at `2,684 per gram

Reserve Bank Of India has fixed the sovereign gold bond, s public issue price at `2,684 per gram. For these bonds applications have been invited from November 5 to 20. Sovereign Gold bonds aim is providing an alternative to buying physical gold scheme. Under this scheme investors will get interest rate of 2.75 per cent and a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams. Aimed at providing an alternative to buying physical gold, the gold bond scheme will offer investors an interest rate of 2.75 per cent and a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams.

RBI said in a statement that the rate has been fixed on the basis of simple average of closing price for gold of 999 purity of the previous week (October 26-30, 2015) published by the India Bullion and Jewellers Association Ltd (IBJA), the RBI added. The bonds will be sold through banks and designated post offices. Bonds would be issued on November 26. This is the first tranche of the gold bond scheme and subsequent tranches would be notified later. The tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates, the statement said. The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold. The bonds can be bought by resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.

Courtesy: Business-Standard.

Unofficial gold import falls sharply: Survey

Unofficial import of gold has seen a significant fall in the September quarter according to GFMS gold survey released on Tuesday. The survey says unofficial or smuggled gold inflow was 28.6 tons, almost half of the 54 tonss seen in the September quarter last year. In the June quarter this year unofficial gold inflow was 21.6 tons. Hence, hardly 50 tons of gold was smuggled into India in the first half of the current financial year. Sudheesh Nambiath, lead analyst for precious metals at GFMS TR said, “The fall is because of premiums prevailing in physical market and cases of seizures by authorities have also increased. As a result profitability in unofficial import has come down.” It may be interesting to note that world gold council had said last year that unofficial import of gold in India was 150 to 200 tons. Figures now coming suggest that trend is reversing.

Courtesy : Business Standard

Gold imports dip 59.5% to $ 1.7 billion in October

Gold imports plunged by 59.5 per cent to $ 1.7 billion in October which will help curb the country’s Current Account Deficit (CAD). The sliding price of the yellow metal is one of the reasons for a dip in imports. The prices are declining in both global and domestic markets. The gold imports stood at $ 4.20 billion in October 2014. The contraction in imports helped in narrowing the trade deficit to $ 9.76 billion in October, lowest since February. It was $ 6.85 billion in that month.

This year, the imports of the yellow metal were up 62.2 per cent and 140 per cent in July and August, respectively. In September, the inward shipments declined by 45.6 per cent. India is the largest importer of gold in the world. The imports mainly cater to the demand of jewellery industry. In 2014-15, gold was the third largest commodity imported in India after crude oil and electronic items. During that fiscal, the country’s imports stood at $ 34.32 billion. The CAD in 2014-15 shrank to 1.3 per cent of GDP ($ 27.5 billion) from 1.7 per cent ($ 32.4 billion) in 2013-14.

Courtesy: Economic Times

India tops China, becomes biggest gold consumer

India regained its top position from China as the biggest overall consumer of gold in the first nine months of this year with a total consumption of 642 tons, a survey said. China is trailing India by just 63 tons, according to the GFMS Gold Survey Q3 2015 Review and Outlook.

In India, jewellery consumption increased by five per cent year-on-year to an estimated 193 tons for the quarter ended September in 2015, the highest quarterly consumption since the March quarter of 2011 and the highest third quarter demand since 2008, the report published by Thomson Reuters stated. The survey said, “Retail investment rose 30 per cent year-on-year to 55 tons, the highest since the fourth quarter of 2013.” Gains during the quarter were primarily attributed to a fall in domestic prices, which declined to the lowest since August 2011. Prices fell to ` 25,000 for 10g in India.

GFMS said another factor that supported higher volumes during the quarter was a significant drop in the exchange of old jewellery for new. Inward remittances from expatriates also influenced demand, as the rupee depreciated towards 67 to a dollar from 63.35 at the beginning of the year. “Charting these sales trends shows family-run retailers turned out to be the first choice over national chains, in a falling-rupee price environment,” the survey said.

The survey said globally, the demand for physical gold rose seven per cent year-on-year in the September quarter, owing to an increase in net official sector buying and stellar retail purchases of bars and coins. Jewellery fabrication, the largest consuming sector, was marginally lower year-on-year, as higher demand in India was offset by a slow recovery in Chinese off-take.

Courtesy : Business Standard

Collective Effort Needed to Unlock 20,000 T of Gold’

Refiners, banks & collection centres together can make a success of GMS The success of the government’s gold monetisation scheme (GMS) aimed at unlocking 20,000 tonnes of the precious metal lying idle in households depends largely on the tripartite agreement between refiners, banks and collection centres, experts said.

If banks can work out effective tie-ups with refiners and collection centres then they can offer a better rate of interest to those who want to deposit gold with them, said members of India Gold Policy Centre at IIM Ahmedabad. The industry wants an interest rate of 2per cent for one year, 2.5per cent for three to five years and 3 per cent for longterm gold deposits for 12-15 years.

“Till date a gold refiner has only dealt with a jeweller, which is a B2B (business-to-business) transaction. Similarly, banks too have largely dealt with financial instruments at the retail level. They also do not have the expertise to deal with retail customers as far as gold is concerned,” said Professor Jayanth Verma, head of India Gold Policy Centre.

Courtesy: Economic Times

GJEPC to conduct probe into diamond grading fraud

The Gems and Jewellery Export Promotion Council (GJEPC) and the Bharat Diamond Boure (BDB) have jointly formed a committee to look into the fraud committed by the Surat and Mumbai based firms and diamond traders by illegally upgrading diamond grading reports issued by the Gemological Institute of America (GIA). Official sources said that the alleged scam highlighted by GIA will have wider impact on international trade as India is the world’s largest supplier of polished diamonds with market share of over 80 per cent.

The GIA has suspended 14 diamond firms from Surat out of the total 19 firms for hacking GIA’s computer database and upgrading the diamond grading reports to pocket Rs 77 crore from the gullible diamond consumers in India and around the world. These diamond firms hacked into the GIA’s computer database, maintained by a top IT firm, and upgraded their 1,042 low quality diamonds by altering the original diamond grading reports.

Sources said that GJEPC has appointed three trade members to carry out thorough probe and gather evidence in the issue. The members will be talking to the top management of GIA, Tata Consultancy Service (TCS), whose database was hacked, and the investigating agency to derive facts about the entire scam and the involvement of diamantaires. GJEPC regional chairman (Gujarat), Dinesh Navadiya said, “The committee is committed to bring out truth in the public domain. Whoever is the culprit will have to face the music

Courtesy: Times of India

Govt provides duty benefits to boost exports

Concerned over exports contracting for the 10th month in a row, the commerce ministry on October 30 extended duty incentives to several products including textiles, pharmaceuticals, project goods, auto components and telecom, computer, and electronics products, in a bid to boost exports. While global support under the Merchandise Exports from India Scheme (MEIS) has been accorded to the above products, higher support under the scheme has been provided to products including industrial machinery, machine tools, parts and machinery for dairy, agriculture, food processing, hand tools used in agriculture etc locks, and reinforced safes among several other things. Earlier, benefits to these items were provided to a few countries “In light of the major challenges being faced by Indian exporters in the backdrop of the global economic slowdown, commerce department has increased support for export of various products and included some additional items under the MEIS,” the department said in an official statement.

Courtesy: Indian Express

Gold imports in Gujarat dip by 80 per cent

Lack of demand, high prices in international market and availability in local markets led to less than five metric tonnes (MT) of gold imports in September this year. However, bullion traders and jewelers believe that low gold imports just ahead of the beginning of long festive season will not impact the sales due to high inventory. According to latest data available only 4.07 MT of gold was imported to Gujarat in September 2015 as compared to 20.81 MT of gold imports during the same period in 2014 – a decrease of 80.5per cent.

“Prices of gold in international market had dropped below $1100 per ounce in first half of August. However, as US Federal Reserve kept interest rates unchanged in September, prices picked up,” said Chirag Thakkar, director, Amrapali Industries. Thakkar further said, “Most of the bullion traders have their inventories full. In anticipation of demand for festive season, large imports took place in July-August.” “Gold prices hovered in the range of Rs 26,700 to Rs 27,700 per 10 gram last month. We expect that once the Navaratri begins, demand will pick up,” said Girish Choksi, city-based bullion trader.

Silver was no different in the current financial year. In September silver imports were at the lowest, only 0.50 MT was imported in Gujarat as compared to 5.93 MT imported in September 2014, registering a fall of 91.5per cent.

Courtesy: Times of India

To cash in on centre’s gold monetisation scheme refiners rush for BIS mark 

Gold refiners in the country are rushing to get a BIS (Bureau of Indian Standards) certification before the government rolls out its gold monetisation scheme, a move; they hope will lift their business that has been sagging due to shortage of scrap gold. Supply of gold to refineries has dropped 20 per cent from the past year with people holding back from selling their possession of the yellow metal due to a steep price fall. The local price of gold has dropped to `26,000 per 10 gm from `32,000 a year ago. India imports about 900 tonnes of gold every year to meet consumer demand. The high level of import is being blamed for the country’s record current account deficit.

The government now wants consumers to put their gold in banks in return for interest payment. Its gold monetisation scheme (GMS) is aimed at unlocking some 20,000 tonnes of gold lying idle in households so that the country’s de pendence on imported gold comes down. “Only four refineries in India are BIS-approved out of 15-odd refineries operating in the organised sector,” James Jose, secretary of the Association of Gold Refineries and Mints, told ET.  “With the announcement of the GMS, refiners have now geared up for the BIS certification. Some have already submitted their application for certification and some are in the process of getting NABL accreditation.” Jose said he expects the scheme to unlock 10-15 tonnes of idle gold in the first year. “We expect that in the coming months, a minimum of 10 gold refineries shall be enrolling into the GMS, with an approximate refining capacity of 500 tonnes per annum, which is sufficient to process all the old gold coming under GMS,” he said. If all the 15 refineries get BIS certification and are included under the GMS, it will take the refining capacity to 750 tonnes, he said.

Courtesy: The Economic Times

RBI issues operational guidelines for Sovereign Gold Bonds

Reserve Bank of India on November 4 said multiple joint holders and nominees (of first holder) are permitted under the Sovereign Gold Bonds, 2015-16, scheme. In its operational guidelines for the Bonds, the RBI said necessary details in this regard should be obtained by scheduled commercial banks (excluding Regional Rural Banks) and designated Post Offices from the applicants as per practice.

Applicants will be paid interest at prevailing savings bank rate from the date of realization of payment to the settlement date, that is the period for which they are out of funds. In case the applicant’s bank account is not with the receiving bank, the interest has to be credited by electronic fund transfer to the account details provided by the applicant. Cancellation of application is permitted till the closure of the issue — November 20, 2015. Part cancellation of submitted request for purchase of gold bonds will not be permitted. No interest on application money will be paid if the application is cancelled.

Sovereign Gold Bond will be issued by Reserve Bank India on behalf of the Government of India. The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions. The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates. The investors will be issued a Stock/Holding Certificate. The Bonds are eligible for conversion into demat form.

Courtesy: The Hindu BusinessLine

Innovation, skill development key for jewellery sector: Survey

The Gems and Jewellery sector in India needs attention of both government and industry members to drive innovations in terms of new designs, processes and skill development of work force to sustain in global markets, says a survey.

Consumer preferences have rapidly changed with the advent of globalisation and demand for new and innovative designs has increased rapidly. In such a scenario, it is high time that Indian manufacturers adopt new methods and engage in research, according to the joint study of Assocham and TARI.

The Associated Chambers of Commerce and Industry of India (Assocham) and Thought Arbitrage Research Institute (TARI) survey also calls for overhauling of this “unorganized sector” which constitutes around 80 per cent of domestic market.

“Due to westernisation of lifestyles, Indian consumers are demanding new designs and varieties in jewellery, and branded jewellers, who are around 15-20 per cent, are able to fulfill their changing demands better than the local unorganised players,” it said.

“Consumer demand is shifting from unbranded to branded jewellery globally. It has jumped to 20 per cent of total demand in 2011 from just 10 per cent in 2003, and it is expected to reach 30 per cent by the end of 2020,” it added.

Courtesy: PTI

Biggest diamond in more than a century unearthed in Botswana

A 1,111 carat gem-quality diamond, second in size only to the Cullinan diamond cut into the British Crown jewels, has been unearthed by Lucara Diamond Corp. in Botswana. The Type-IIa stone, just smaller than a tennis ball, is the largest diamond discovery for more than 100 years, according to Vancouver-based Lucara. It was recovered by machines at the south lobe of Karowe mine in central Botswana, the company said in a statement.

We’ve always thought very highly of our resource,” William Lamb, chief executive officer of Lucara, said on a call with investors Thursday. “You’d have to be a very brave person to predict a stone like this.” Lucara’s Karowe mine in Botswana is rivaling Gem Diamonds Ltd.’s Letseng operation in Lesotho as a source of the world’s biggest and best stones. Gem Diamonds previously held the record for the largest discovered this century with the 603-carat Lesotho Promise.

“It is almost impossible to estimate a value for such an extraordinary stone given that a valuation is highly dependent on the color, clarity and cutting and polishing characteristics,” Edward Sterck, a London-based analyst at BMO Capital Markets, wrote in a note.

Courtesy: Bloomberg

Lukewarm response to gold bonds

The Centre’s pet scheme, Sovereign Gold Bonds, has met with lukewarm response in the first tranche. The issue, which was open for two weeks, closed on Friday and is estimated to have collected only about `150 crore.

One reason for the tepid response is the correction that gold prices have seen in the last few weeks. On October 30, the Centre announced the face value of the gold bond as `2,684 per gram. But by the time the issue opened, prices in the market had dropped to `2,580 and by last Friday the metal was quoting at `2,548/gram, over 5 per cent below the price fixed for the gold bond.

With the bond promising an interest rate of 2.75 per cent, any one who invested in it essentially would have to wait for two years to make good the notional loss of investing at higher price. Distributors also highlight some procedural glitches as reasons for the weak response.

Courtesy: Hindu BusinessLine

GJEPC Plans Advertising Push With Global Miners to Revive Diamond Trade

India’s Gem & Jewellery Export Promotion Council (GJEPC) is planning to team up with the world’s leading miners to drum up interest in the country’s diamonds through promotional campaigns and celebrity endorsements, according to The Economic Times. The council is considering joining hands with the likes of Rio Tinto, ALROSA and De Beers for marketing diamonds into strategic hubs such as China, Latin America and the Middle East, the daily newspaper reported.

The trade body will hire country-specific advertising agencies to initiate campaigns based on local purchasing trends, the newspaper citing GJEPC chairman Praveen Shankar Pandya as saying. India’s polished diamond exports plummeted 17 percent in October, taking the plunge in the first ten months to 51 percent, according to GJEPC. “We have taken the decision to launch a promotional campaign for diamonds in key markets to revive exports,” the report cited Pandya as saying.

“Miners, who are the major stakeholders in the industry, will have to be included in this initiative. Talks have begun and we are hopeful that the entire thing will be finalized within a month.”

Courtesy: Rapaport

First shipment of roughs arrives at SNZ from Rio Tinto

The first shipment of parcels containing rough diamonds were brought by the diamond mining giant Rio Tinto Diamonds on a trial basis to Indian Diamond Trading Centre’s (IDTC) Special Notified Zone (SNZ) in Mumbai on Monday, which were re-exported on Tuesday. This is being seen as a step that will help establish India as a trading hub of rough diamonds in the world.

The IDTC, set up jointly by Gems and Jewellery Export Promotion Council (GJEPC) and Bharat Diamond Bourse (BDB), is the first SNZ in the country to trade in rough diamonds under special laws which will benefit a majority of diamond companies, especially small and medium units in Surat.

India imports rough diamonds to the tune of $16 billion per annum. While 70 per cent of rough diamonds come through world’s top diamond mining companies including De Beers, Rio Tinto, Alrosa, Dominion Diamonds etc., the rest are directly imported from Antwerp and Dubai.

“It was a small shipment of rough diamonds imported to the IDTC’s SNZ on a trial basis from Australia. The IDTC has shown its readiness to operate the SNZ for rough diamonds viewing and auctions. The IDTC has all the government approvals in place, including state-of-the-art customs clearance and internal infrastructure,” said India manager of Rio Tinto Diamonds, Vikram Merchant.

Courtesy: Times of India