Banks cannot function as traders of commodities, including gold, RBI chief general manager (communication) Mumbai Alpana Killawala told PTI over phone when asked about the reason behind the policy.
Imports are down also because local traders are clearing unaccounted stock after introduction of 1 per cent excise duty
Silver also plunged by Rs 1,300 to Rs 46,000 per kg on poor offtake by jewellery fabricators and industrial units.
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"Demand for gold is virtually zero," said Suresh Hundia, president of the Bombay Bullion Association. "People are taking profits and selling their gold back to jewellers for 2.5-3 per cent less than international market prices."
Gold purchases by India, the world's largest importer of the metal, are down to a trickle because of high prices, prompting local traders and jewellers to reprocess scrap and jewellery to cater to rapidly falling local demand.
"Despite the marriage season being on, almost all gold ornament shops have reported a sharp fall in their sales," said P Satya Narayan Senapati, president, Berhampur Jewellery Association. At the peak of the marriage season, the gold trade in Behrampur reached around Rs 1 crore (Rs 10 million) per day earlier. Given the uptrend and volatility in the price of gold, there is scanty demand for the yellow metal and only need-based buying by the customers.
Gold prices maintained an upward march for the third consecutive day by rising Rs 290 to Rs 30,490 per ten grams in the national capital on sustained buying by stockists amid a firm global trend.
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Global gold prices held below $1,200 an ounce this week.
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"Not a single step has been taken by this government to empower small businesses in India," says Praveen Khandelwal, national secretary general of the Confederation of All India Traders and former treasurer of the Bharatiya Janata Party's Delhi unit.
Gold prices in India soared to record highs on Thursday, prompting many people in the world's largest bullion consumer to sell old stock, traders said.
Silver also turned weak and dropped by Rs 350 to Rs 41,200 per kg on reduced offtake by industrial units and coin makers.
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Despite the freeze on diplomatic ties between India and Pakistan and protests against the fair, traders at the recently concluded four-day Aalishan Pakistan exhibition did brisk business, reports Upasna Pandey.
Silver has a dual role - 60 per cent of the total silver produced is used for industrial purposes in the electrical & electronics segment and photovoltaic demand mostly for solar panels.
India, the world's largest gold consumer, is likely to resume import of the precious metal this week after a long lull, as global prices have fallen sharply amid signs the United States is unlikely to attack Iraq immediately.
Globally, gold added 0.4 per cent to $1,228.65 an ounce in Singapore.
The department has found that Rs 100 crore were deposited in 500 Jan Dhan accounts in the banks in western Madhya Pradesh post-demonetisation.
The ED has claimed that Nirav Modi had refused to join the probe despite acknowledging mails and summons issued to him and that he doesn't want to return to India.
In the second of a six-part series, Sanjay Jog of Business Standard walks across the streets of Indore to find out how it has been hit by demonetisation.
Bombay Bullion Association to develop a software for the same.
Silver, however, recovered by Rs 50 to Rs 36,800 per kg
When the lockdown was lifted last year, Rasikbhai Kotadiya, who runs a powerloom unit in the Kim-Pipodara industrial area on the outskirts of Surat, was left with only four workers out of the 48 that he used to employ to run his 128 looms. Though the economy had been unlocked, his textile unit, and that of thousands of others, struggled to resume operations. By the last week of May, nearly 700,000 of Surat's 1.2-1.5 million migrant workers, left high and dry with no pay during the lockdown, had returned home. In Laskana, another textile weaving hub in Surat, the powerlooms were all but silent, with only 2,000 of the total 55,000 looms churning out grey cloth at a snail's pace.
Bullion traders said sustained buying by jewellery fabricators and retailers to meet the festive season demand mainly kept precious metal prices higher.
On the domestic front, gold of 99.9 and 99.5 per cent purity recovered by Rs 15 each to Rs 30,050 and Rs 29,850 per ten gram, respectively.
Silver also shot up by Rs 400 to Rs 34,400 per kg.
Traders said buying activity emerged for the ongoing marriage season as the metal remained weak in the previous session.
Of the 11,000 kg imported between July 1 and August 9, around 90 per cent was brought in by two business groups which took advantage of the favourable reduction in tax incidence under GST, routing their imports through Korea.
From farmers to cement, steel, logistics, transportation and automobiles, the back-end is struggling to get going due to the liquidity crisis.
Silver followed suit and recovered Rs 400 to Rs 34,100 per kg.
As the Congress party prepares to launch protests against the economic slowdown, Chhattisgarh Chief Minister Bhupesh Baghel tells Archis Mohan that his state has escaped its effects as his government has pursued policies that have put money in the pockets of workers, farmers, housewives and tribals, which has helped spur demand.
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Traders said reduced offtake by retailers and jewellery fabricators at existing higher levels mainly kept pressure on the prices of both the precious metals.
Gold in global markets fell toward a one-week low as investors awaited the outcome of the US Federal Reserve's meeting and assessed the situation in Ukraine, which impacted the prices at domestic markets, traders said.
Gold bullion purchases across Asia slowed this week as a long rally in prices discouraged buyers.
Smuggled gold, which is selling sharply lower than the spot market price, is also responsible for discounts not ending. Some consumers are selling high amounts of gold.
The government has not given any concrete assurance on the rollback of excise duty.
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