MUMBAI: A hike in taxes on gold sales in India could pressure short-term demand from the world’s No.2 consumer of the metal, the World Gold Council (WGC) said in a report.
Faltering appetite in a country where gold is used in everything from investment to wedding gifts could drag further on global prices, already trading near their lowest level in eight weeks.
“In the short-term at least, we believe (the tax) may pose challenges for the industry. Small-scale artisans and retailers with varying degrees of tax compliance may struggle to adapt,” the WGC said in a report published on Thursday.
As part of a new nationwide sales tax regime that kicked in on July 1, the Goods and Services Tax (GST) on gold has jumped to 3 percent from 1.2 percent previously.
There have been fears the tax increase could stoke under-the-counter buying and drive up appetite for precious metal smuggled into India, where millions of people store chunks of their wealth in bullion and jewelry.
Meanwhile, the WGC also said a government move to ban cash transactions over 200,000 rupees ($3,090) from April 1 could hurt gold demand in rural areas where farmers often purchase the metal using cash due to limited access to cheques and electronic payment systems.
Two-thirds of India’s gold demand comes from rural areas, where jewelry is a traditional store of wealth.
“(The transactions rule’s) potential impact isn’t entirely clear: it could curb gold purchases; it could encourage gold shoppers to buy smaller amounts of gold spread over more transactions; or it could push a large part of demand underground and encourage a black market in gold,” said the WGC.
The group kept its demand estimate for India at 650 to 750 tons for 2017, well below average annual demand of 846 tons in the past five years.
In the long-term, the GST will have a positive effect on the gold industry by making the sector more transparent and improving the supply chain, the WGC added.
New tax could dampen India gold demand in short-term -WGC
New tax could dampen India gold demand in short-term -WGC
Saudi Arabia’s foreign reserves rise to a 6-year high of $475bn
RIYADH: Saudi Arabia’s foreign reserves climbed 3 percent month on month in January to SR1.78 trillion, up SR58.7 billion ($15.6 billion) from December and marking a six-year high.
On an annual basis, the Saudi Central Bank’s net foreign assets rose by 10 percent, equivalent to SR155.8 billion, according to data from the Saudi Central Bank, Argaam reported.
The reserve assets, a crucial indicator of economic stability and external financial strength, comprise several key components.
According to the central bank, also known as SAMA, the Kingdom’s reserves include foreign securities, foreign currency, and bank deposits, as well as its reserve position at the International Monetary Fund, Special Drawing Rights, and monetary gold.
The rise in reserves underscores the strength and liquidity of the Kingdom’s financial position and aligns with Saudi Arabia’s goal of strengthening its financial safety net as it advances economic diversification under Vision 2030.
The value of foreign currency reserves, which represent approximately 95 percent of the total holdings, increased by about 10 percent during January 2026 compared to the same month in 2025, reaching SR1.68 trillion.
The value of the reserve at the IMF increased by 9 percent to reach SR13.1 billion.
Meanwhile, SDRs rose by 5 percent during the period to reach SR80.5 billion.
The Kingdom’s gold reserves remained stable at SR1.62 billion, the same level it has maintained since January 2008.
Saudi Arabia’s foreign reserve assets saw a monthly rise of 5 percent in November, climbing to SR1.74 trillion, according to the Kingdom’s central bank.
Overall, the continued advancement in reserve assets highlights the strength of Saudi Arabia’s fiscal and monetary buffers. These resources support the national currency, help maintain financial system stability, and enhance the country’s ability to navigate global economic volatility.
The sustained accumulation of foreign reserves is a critical pillar of the Kingdom’s economic stability. It directly reinforces investor confidence in the riyal’s peg to the US dollar, a foundational monetary policy, by providing SAMA with ample resources to defend the currency if needed.
Furthermore, this financial buffer enhances the nation’s sovereign credit profile, lowers national borrowing costs, and provides essential fiscal space to navigate global economic volatility while continuing to fund its ambitious Vision 2030 transformation agenda.
