Ban on gold coin sale steers panic among Indian investors

MUMBAI (Scrap Monster) : The abrupt declaration by the Indian gold jewellery body to halt sale of gold coins at all their member outlets with effect from July 1^st has created panic among investors.

Gold jewellers across the country had launched an array of gold savings scheme during the price crash in April. Such schemes permit investors to deposit money in installments of their choice to procure gold coins for future use. The schemes managed to pull huge investor interest primarily due to the fact that gold coin hardly had any wastage as compared to losses in the form of making charges in the case of gold jewellery.

The announcement by the All India Gems and Jewellery Trade Federation (GJF) to temporarily stop all gold coin sales steered panic among the investors who were uncertain about the fate of the gold savings schemes.

However, the member outlets have confirmed that all the schemes will continue as per schedule. The customers will be delivered the promised quantity of gold, but may be in the form of jewellery. Even this would eventually result in a loss for customers as they would have to pay extra charges in the form of making charges for jewellery.

According to statistics available, sale of gold bars and coins constituted almost 35% of the total gold imports by the country last year. The move by GJF to stop the sale of coins is aimed at curbing gold imports.