Gold prices which have fallen internationally may fall even further in the domestic market as the Reserve Bank of India has scrapped the 80:20 Gold Import Scheme.
"It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold. Accordingly, all instructions issued about the scheme from time to time stand withdrawn," the RBI has said in a release.
"We believe the move (to scrap 80:20) will do away with the distortions and calm the market which was anticipating some curbs to restrict gold imports," an official said, adding this would help reduce imports. "This scheme was totally impractical as it was promoting monoplistic business practices. After scrapping of this scheme, gold prices may come down as there is dip in overall demand in global markets, crude prices are already down and now importers will also charge less premium on import of gold," All India Gems and Jewellery Federation Chairman Haresh Soni told PTI.
International gold on Friday ended 2 per cent lower as investors bought into equities and sold gold. The metal has seen continuous pressure and may continue to fall.