Exchange of ₹2000 notes at banks have begun this week, in line with RBI’s directions for withdrawing the highest denomination currency of India. RBI has guided customers to take two possible actions, either exchange their ₹2000 notes or deposits for which the central bank has given over four-months timeframe. However, the withdrawal has also led to a massive rush at jewellery shops for buying gold against ₹2000 notes. And this has already made physical gold expensive for buyers!
Eshwar Surana, Managing Director, of Raj Diamonds said, “Cash transactions have sharply risen and we are definitely witnessing some rush situations in the market. The phasing out of 2000-rupee notes has created a sense of urgency among the people to safeguard their monetary value by investing in jewellery.”
As per a Reuters report, physical gold flipped to premiums in India this week for the first time in nearly three months, as retreating domestic prices along with the central bank’s move to withdraw the country’s highest value currency notes boosted buying.
That being said, Indian dealers selling gold at a premium of up to $3 an ounce over official domestic prices — which is inclusive of the 15% import and 3% sales levies. This is the opposite of the discount of 5% offered last week.
Overall, this week, local gold prices dipped to ₹59,363 per 10 grams which is the lowest since April 3.
Indians have till September 30, 2023, to exchange ₹2000 notes. The process began on May 23rd.
On Friday, spot gold prices picked up 0.33% to $1,946.69 an ounce, while gold futures edged up 0.03% to end at $1,944.30 per ounce.
