After The Announcement Of Withdrawal Of 2000 Notes, What Is The Impact On The Gold And Silver Market?

The recent announcement by the Reserve Bank of India (RBI) regarding the withdrawal of ₹2,000 notes has sparked discussions about its impact on various sectors, including the gold and silver market.

This move, aimed at addressing concerns related to counterfeit currency and the circulation of high-value notes, has left many wondering how it will affect the precious metals industry. To gain insights into this matter, we spoke to jewelers and experts in the field to understand their perspectives on the potential implications of this decision.

The decision to withdraw the ₹2,000 notes is expected to have both short-term and long-term effects on the gold and silver market. While it may initially lead to a temporary slowdown in sales, industry experts believe that the impact will not be significant in the long run.
We spoke to several jewelers to gather their views on the matter. Mr. Colin Shah, MD, Kama Jewelry's perspective on gold prices, "Gold prices are trading on a weak note, domestically the prices have fallen below the Rs 60,000/10gm mark. Internationally, the prices have slipped below the $2,000/oz mark. A hawkish comment from one of the US Fed officials on a likely rate hike in CY23 has led to a strengthening in the US dollar. Gold is a global commodity, valued in USD and a rise in the USD makes buying gold dearer. Also, the uncertainty surrounding the debt ceiling in the US has led to uncertainty around USD and gold prices. We expect gold to trade rangebound till clarity emerges from the US on the debt ceiling, the next Fed meeting.
Back home, the RBI has announced the withdrawal of Rs 2000 currency notes. There are some reports of panic gold buying to exhaust the Rs 2000 currency notes. This may lead to a rise in demand for gold albeit temporarily. While gold is a good preposition from an asset allocation point of view. Investors should not look at hoarding it. They should keep in mind the prescribed limits for individuals to hold and store gold at home for individuals, unmarried and married women",

On the condition of anonymity one of the officials of PC Jeweller informed," There is no such change in the price and demand of the gold and silver jewellery due to the withdrawal of 2000 rupees notes. The price for 22 carat gold is Rs.5625 per gram today."

One of the highest officials of tanishq said," The announcement of the withdrawal of the 2000 rupee note has had no impact on the demand for gold, which remains consistent and unaffected and there is no rush and panic-related situation in the market."

"The day the RBI announced the withdrawal, some shop owners might have tried to take advantage by raising the prices. However, customers were well-informed and refused to pay the premium." said a jewellery shop owner who sought anonymity.