Why jewelry stocks are surging today
What's the story
Shares of jewelry companies have witnessed a major surge after the Indian government slashed the base import prices of gold and silver. The move is expected to ease input costs and support margins for these companies. Senco Gold's shares jumped by 11% to ₹320.6, while Kalyan Jewellers' shares gained 5.4% to ₹415.65 on the stock market today.
Policy change
Significant reduction in base import prices
The government has reduced the base import price of silver from $2,820/kg to $2,427/kg (₹2,26,096/kg) and gold from $1,652/10gm to $1,526/10gm (₹1,42,223). This policy change is expected to lower procurement costs for jewelers and improve inventory economics. It could also boost demand by making precious metals relatively cheaper for consumers amid ongoing geopolitical tensions.
Rate today
Gold falls over 1% amid strong dollar, waning rate-cut expections
Gold prices witnessed a drop on Monday, falling over 1% due to a stronger US dollar and waning expectations of interest rate cuts by the Federal Reserve. Spot gold fell 1.2% to $4,620.68 per ounce while US gold futures for April delivery lost 0.7% to $4,647.1. Spot silver declined 1% to $72.28 per ounce. The rise in the 10-year US Treasury yield and dollar index also weighed on greenback-priced bullion.