Indian Gold Industry Forms Self-Regulatory Body with WGC Support

India's gold industry, backed by the World Gold Council (WGC), has initiated the formation of a self-regulatory organization to enhance consumer trust and confidence, the WGC announced on Tuesday. 

The Indian Association for Gold Excellence and Standards (IAGES) has been newly established with the aim of fostering fair, transparent, and sustainable practices within the bullion sector. It will also focus on regulatory adherence, a code of conduct, and an audit framework, according to Sachin Jain, CEO of WGC's Indian operations.

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India, which ranks as the second-largest gold consumer globally after China, faces a trust deficit among consumers and the government due to unethical practices by a minority within the industry, Jain noted.

"The association's goal is to offer accreditation through a rigorous audit process. Upon passing the audit, members will be granted the IAGES logo for display," Jain explained to Reuters, without providing specifics about the audit framework.

Jain mentioned that industry organizations such as the Indian Bullion and Jewellers Association (IBJA), All India Gems and Jewellery Council of India (GJC), and Gem and Jewellery Export Promotion Council (GJEPC) would participate in IAGES.

The WGC will spearhead efforts to raise awareness of IAGES among retail consumers and will fund the promotional campaign, Jain added.

According to a WGC report last month, India's gold demand decreased by 5% in the June quarter compared to the previous year. However, consumption is expected to rebound in the second half of 2024 due to a correction in local prices following a significant reduction in import taxes.

On Monday, gold prices experienced a decline of over 2% during a volatile trading session as investors sold off assets amidst a broader equity market selloff. By 1139 GMT (0400 IST), spot gold had fallen by 2% to $2,393.66 per ounce, while U.S. gold futures decreased by 1.4%, closing at $2,434.10. Check MCX Gold Rate Today Live

Gold, often considered a safe-haven asset, typically performs well in low-interest-rate environments. However, current market sentiments have led to a drop in bullion prices. Other precious metals also faced declines: spot silver fell by 5.7% to $26.92 per ounce, platinum dropped by 4.1% to $918.35, and palladium decreased by 4.5% to $849.05, its lowest since August 2018. These metals have been affected by concerns regarding long-term risks associated with the transition to net-zero emissions.

Bullion, generally regarded as a hedge against geopolitical and economic uncertainties, tends to thrive when interest rates are low. Nonetheless, apprehensions about a potential recession have driven down prices for other precious metals.