The Financial Times reported on Friday (September 20) that after India recently lowered tariffs, there has been a surge in demand for gold jewelry and bars from Indian consumers, which has helped drive global gold prices to record highs.

According to data released by the Indian government on Tuesday, India's gold imports in August reached the highest level on record in US dollars, reaching 10.06 billion US dollars.

According to preliminary estimates from consulting firm Metals Focus, this means that India's gold imports are approximately 131 tons, which is the sixth highest total import volume in history in terms of quantity.

The high price of gold, which has risen by $25 since the beginning of this year, has traditionally deterred price sensitive Asian buyers, causing Indians to reduce their demand for gold jewelry.

But the Indian government lowered gold import tariffs by 9 percentage points at the end of July, triggering a surge in demand from the world's second-largest gold buyer.

(Screenshot source: Financial Times)

Philip Newman, Managing Director of Metals Focus in London, said, "The impact of tariff cuts is unprecedented and unbelievable. It has indeed attracted consumers

The tariff reduction is a blessing for Indian jewelry stores. Ram Raimalani, the head of MK Jewels jewelry store in Mumbai, said that "demand is very strong".

On a recent afternoon, customers flocked into the store to purchase necklaces and bracelets. Raimalani expects annual sales to increase by 40% during the holiday and wedding peak season from September to February.

Raimalani praised the Indian government and Prime Minister Narendra Modi's measures to reduce gold tariffs.

Analysts say that the expectation of a rapid interest rate cut by the Federal Reserve has been the main driving force behind the significant rise in gold prices this year. The lower borrowing costs increase the attractiveness of non yielding assets such as gold and may also put pressure on the US dollar.

The Federal Reserve cut interest rates by 50 basis points on Wednesday, pushing gold prices to a historic high of $2600 per ounce.

But strong demand for gold jewelry and bars, as well as purchases from central banks around the world, have also helped boost gold prices.

According to data from the World Gold Council, India accounted for about one-third of gold jewelry demand last year and has become the world's second-largest market for gold bars and coins.