The price of gold in the United Arab Emirates (UAE) observed a downward trend in the morning trading session on Monday, March 6.
The price of the purest type of the precious yellow metal, 24-carat variety, slipped by Arab Emirati Dirham (AED) 0.5 or Indian Rupee (INR) 11.13. The rate of a gram of this type of gold stood at Dh 224.5 or Rs 4,999.63. This is reflective of a change in global sentiment regarding the value of gold.
According to the data provided by Dubai Gold And Jewellery Group, the price of a gram of 22-carat variety tumbled by Dh 0.25 or Rs 5.56, and stood at Dh 208 in Dubai.
As per the exchange rate this morning, this was equivalent to Rs 4,631.7. On Monday, one gram of 21-carat gold traded at Dh 201.25 or Rs 4,481.94. This is also a price drop of Dh 0.25. The price of 18-carat gold fell by a similar amount, and traded at Dh 172.5 or Rs 3,841.68.
On Monday, a kilogram of silver in UAE cost Dh 2512.74 or Rs 55,958.34.
The Gulf Tiger offers customers one of the lowest rates of gold in the world, courtesy of the relaxed taxation policy of the UAE government.
Purchasing gold ingots (bars) is tax-free in the Middle-eastern country. For all other gold articles, customers have to pay a value-added tax (VAT) of 5 percent. This is one of the lowest tax rates on the precious yellow metal in the world. This VAT is only applicable to UAE citizens. Tourists can have this charge waived simply by declaring their foreign passports.
The price of gold jewellery and other such items can also be brought down by negotiating on the making charges. There is a much wider margin to bargain here due to the availability of cheap labour in Dubai.
While purchasing gold in Dubai is more profitable than in other countries, importing it is not. Indians’ love of gold has been known to adversely impact the country’s balance of payments.
To curb imports from Dubai, the Indian government has several charges in place.
Social welfare tax and other import duties on the precious metal raise the cost for those who want to purchase gold from Dubai and sell it for a profit in India.
These charges apply on amounts of gold greater than the allowed quantity.
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