GST reform implementation: How will it impact gold demand?

Even thoughgold rates are high, the demand for the precious metal can remain robustover the next few weeks. The demand will be supported by the festive season, cultural reasons, and the central government's GST reforms. The central government has eliminated the 12 per cent and 28 per cent GST slabs. It has placed most of the goods and services under these categories into 5 per cent and 18 per cent slabs, lowering the GST on them.

In terms of jewellery demand, India and China serve as catalysts – together, they account for over 50 per cent of demand. Mirae Asset Mutual Fund has said in a report that the expected recovery in consumer spending might increase gold jewellery purchases in India.

Price elasticity may cap demand recovery for the yellow metal, Mirae Asset Mutual Fund added.

"We expect gold would likely to move upside going ahead from the current level and remain cautiously optimistic with caveats triggering in corrections," the report read.

In August, gold closed atUSD 3,429 per ounce, marking a 3.9 per cent monthly gain. This over, gold has grown over 35 per cent internationally.

The prices of gold, according to theMulti-Commodity Exchange of India (MCX),are currently around Rs 109,000 per 10 grams.

India's gold performance is better than most. It is because of the demand for investment and domestic consumption.

In India, the GST reform will put more money in the hands of the masses. This will boost domestic consumption. Also, festive and marriage seasons will continue the trend of buying gold. Experts believe that gold prices may see an uptick in 2026 and can even cross the Rs 1,25,000 mark.