Gold Coin Sales Halted
In a significant move affecting the gold market, around 30,000 jewelers across Tamil Nadu have decided to cease the sale of gold coins and discontinue
promoting various gold savings and other promotional schemes. This collective action was announced by B. Sabarinath, the president of the Tamil Nadu Jewellers Federation. The decision stems from recent developments, including an overnight increase in the import duty on gold jewellery and advisories from Prime Minister Narendra Modi regarding the nation's foreign currency reserves. The federation views this step as a crucial measure to contribute towards reducing the country's gold imports, a growing concern for economic stability.
Economic Pressures Mount
The jewellers' federation highlighted the mounting economic pressures influencing their decision. An unexpected hike in import duty on gold, coupled with speculation of a potential Goods and Services Tax (GST) increase, has created an uncertain environment. Sabarinath pointed out that even the Reserve Bank of India had acquired a substantial 125 tonnes of gold in the previous month, indicating the scale of gold transactions. He expressed concerns that jewellers, many of whom have taken loans from banks, might face difficulties in meeting repayment obligations if consumer demand for gold is significantly curtailed due to these external factors and price volatilities.
Price Surge and Impact
The impact of the increased taxes is already visible in the retail market. According to S.M. Kamal Hasan, president of the Coimbatore Goldsmiths’ Association, the price of gold saw a sharp rise of ₹1000 per gram on Wednesday, May 13, 2026. Gold, which was priced at ₹14,400 per gram on Tuesday, jumped to ₹15,400 per gram the following day. A significant portion of this increase, amounting to ₹3,000 per gram, is attributed solely to the enhanced taxes. With the peak wedding season approaching next month, industry stakeholders are keenly observing how these price hikes and economic uncertainties will influence consumer spending habits and demand for gold jewellery.
Industry's Plea to Government
Beyond halting coin sales, the Tamil Nadu Jewellers Federation has put forth a comprehensive roadmap to the government, aiming to streamline gold management and reduce imports. Sabarinath indicated that sales have already experienced a significant decline of 60% over the past year, largely due to fluctuating gold prices. He proposed involving jewellers in gold monetisation schemes to bring an estimated 25,000 tonnes of gold currently held by consumers into the formal financial system. Furthermore, the association is urgently requesting the government to implement an immediate ban on Exchange Traded Funds (ETFs) and digital gold sales, alongside stricter controls on gold importers, channelling agents, and bullion dealers to regulate the market more effectively.
