Revenue Secretary Ajay Bhushan Pandey on Sunday said that the government was looking at how to standardise gold prices, something which needs to be addressed. He said gold prices were moving up as people the world over have started shifting their investments to other asset classes, including gold.
"Internationally, the security market indexes, whether it is the US market, whether it is Japanese or Shanghai, it is going down. It is a general tendency in the world. If asset class start giving low returns, people shift to other asset class and gold is one of them. Therefore prices are increasing", he told reporters here.
Pandey was responding to a query on the increase in gold prices and whether it was a cause of concern and if the government planned to introduce a gold monetisation scheme. He said Rupee depreciation against the U.S. Dollar was also another factor. "That (rupee depreciation) is also adding to the total price (increase). You should have seen from where to where it has gone in the last four-five months. In this background we have to see our foreign exchange position", he said.
Noting that the government has to consider the balance of payments position, he said "if we do not manage it properly then this further puts pressure on the exchange rate. And that is a very fine balance we have to exercise." "One of the problems is how do you ascertain the value of gold. You know people have gold in their possession and it is not something that is standardised. Monetisation means it should have some standardisation. If you have certain amount of jewellery of 22 carats or 18 carats or mixed with xyz, the problems arise. Whenever these discussions takes place, this also needs to be addressed. So this is where we are", he said.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.