Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Commodities»Agricultural, Non-Agricultural Commodities Receive Due Attention
    Commodities

    Agricultural, Non-Agricultural Commodities Receive Due Attention

    July 27, 20243 Mins Read


    Interestingly, agricultural and non-agricultural commodities both have received the attention of Finance Minister Nirmala Sitharaman in the Union budget 2024-25.

    In the non-agricultural commodity sector, the most important announcement was the sharp reduction in customs duty on gold and silver—from 15% to 6% ad valorem. What prompted such a massive fiscal relief, despite the government’s accepted position that gold is a demerit commodity, is unclear. The revenue foregone is another point; it hasn’t been quantified.

    To be fair, international gold prices have risen in the last two quarters to the extent of 20-25%, to a new record high of about $2,450 an ounce recently. This was the result of unabated geopolitical tensions, purchases by central bankers, especially China, and of course, the inflow of huge speculative capital.

    The international market price movements promptly reflect in the domestic price of the precious metal as India is almost entirely import dependent and trade is largely unregulated. Taking a cue from the global market, domestic rates too reached unprecedented levels—above Rs 70,000 per 10 grams. This resulted in slowing physical jewellery purchases by consumers, as gold demand is price elastic.

    While sharp rise in international prices created some justification for a commensurate reduction in our customs duty, the Finance Minister has been extraordinarily generous in allowing a 60% relief in customs duty. The bullion trade is of course delighted.

    Soon after the budget announcement, domestic prices collapsed. Gold fell by Rs 4,000 per 10 grams to a four-month low, while silver prices fell to a three-month low. There is reason to believe there’s more downside correction left for gold, perhaps to the extent of Rs 1,500.

    Will the current decline in bullion prices spur demand? It is doubtful. Of course, the upcoming festival season and marriage season will surely boost demand to an extent, but the trend may not sustain. Jewellery makers would be happy to liquidate their excess inventory.

    Where do we go from here? In the short term, gold is likely to fall further. It is worth mentioning that gold prices actually carry a war-risk premium of up to $200/oz. If tensions abate or a ceasefire is declared, gold rates will collapse and move closer to $2,000/oz; that’s the risk the gold market carries.

    The Finance Minister referred to critical minerals needed to pursue our energy transition efforts. In a welcome step, the budget has liberalised the import of several metals like lithium, nickel and so on.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    Keystone Bank partners Lagos govt on Renewed Hope Agricultural Support Programme

    Commodities

    Trump, Congressional Republicans propose big cuts for Western renewable energy labs, research

    Commodities

    MAFWR adopts drones, smart irrigation in agricultural push

    Commodities

    Royal Agricultural University unveils new ram sculpture

    Commodities

    The bitter reality behind sugarcane downstreaming – Academia

    Commodities

    The Commodities Feed: Oil falls after latest OPEC+ supply hike | articles

    Commodities
    Leave A Reply Cancel Reply

    Top Picks
    Precious Metal

    Thomas Faure repart à l’assaut d’une ceinture EBU silver

    Investments

    le commerce mondial sera affecté la croissance

    Commodities

    FG urges tech experts to leverage AI for agricultural growth

    Editors Picks

    What Kamala Harris should about crypto

    August 5, 2024

    Call to end nuclear power ban brings heated reaction in Australia

    August 12, 2024

    Prep roundup: Bessinger throws for 7 TDs, Davis football crushes Copper Hills | News, Sports, Jobs

    August 24, 2024

    Smart Investor: Top Defensive Stocks, Is the Market Cheap, and When Will the Fed Cut Rates?

    March 22, 2025
    What's Hot

    Chinney Investments prévoit une augmentation de sa perte annuelle

    June 13, 2025

    HERO lève 50 ME de dette auprès de Sienna IM

    February 13, 2025

    Dodge & Cox Is Piling Into These Dividend Stocks

    August 22, 2024
    Our Picks

    Robust Growth in Precious Metal Accounts Market (2024-2031):

    July 17, 2024

    AXIAN Energy lance la construction de la centrale solaire NEA Kolda (60 MW) au Sénégal

    May 23, 2025

    Grayscale files S-3 for Digital Large Cap ETF

    April 1, 2025
    Weekly Top

    FinTech accelerator to boost black-owned innovation in insurance

    August 4, 2025

    Tyson Fury makes shock retirement U-turn weeks after Oleksandr Usyk and Anthony Joshua admissions

    August 4, 2025

    Odisha to launch India’s first global FinTech hub

    August 4, 2025
    Editor's Pick

    les fondamentaux de l’or restent bons

    September 4, 2007

    Solar United Neighbors, Energy Allies to combine solar nonprofit efforts

    August 22, 2024

    Govt seeks to address low agricultural prices

    July 27, 2024
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.