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The rise showed the first year-on-year increase in first half of the year. However, gold demand is forecast to slide to record low as virus-related restrictions left million jobless.
Finance ministry plans to ask people with unaccounted holdings of gold to declare it to tax authorities and pay levies and penalty.
The consumption of gold fell 56% from a year earlier to 165.6 tons in the first half of 2020. The drop is unlikely to be made up during the rest of the year.
India’s demand for gold-backed loans has risen as its price crosses Rs 50,000 per 10 gm, allowing families to borrow larger amounts against holdings.
Coronavirus has unleashed a torrent of forces that are conspiring to fuel relentless demand for the perceived safety from turmoil that gold provides.
M. Sivasankar was allegedly close to Swapna Suresh, the key figure in smuggling 30 kg of gold bars in a diplomatic bag bound for the UAE Consulate.
Gold is up 15% this year, buoyed by unprecedented stimulus to aid the global economy hurt by the Covid pandemic.
Demand for gold had already slowed due to high prices before the pandemic struck. Jewellers are now waiting for the festival season for a boost.
India, the second largest consumer of gold in the world, has seen the lowest monthly inflow in records going back to 2010.
Geological Survey of India said the organisation carried out work in the region in 1998-99 and 1999-2000. However, the results of exploration work for gold were not encouraging.