India’s gold industry, with backing from the World Gold Council (WGC), has established a self-regulatory organisation named the Indian Association for Gold Excellence and Standards (IAGES).
This initiative aims to enhance consumer confidence and trust within the industry by promoting fair, transparent, and sustainable practices. Sachin Jain, CEO of WGC’s Indian operations, emphasised the role of IAGES in improving regulatory compliance, establishing a code of conduct, and introducing an audit framework.
Aiming for Higher Standards
India, the world’s second-largest gold consumer after China, faces a trust deficit due to unethical practices by a minority within the sector. The formation of IAGES aims to address these issues by providing accreditation through a thorough audit process. Members who pass the audit will earn the right to display the IAGES logo. “The purpose of this association is to provide accreditation based on a very strict audit. After the audit, the member will earn the IAGES logo, which they can display,” said Jain.
Industry Involvement and Governance
Key industry associations, including the Indian Bullion and Jewellers Association (IBJA), All India Gems and Jewellery Council (GJC), and Gem and Jewellery Export Promotion Council (GJEPC), are integral stakeholders in IAGES. The organisation will be independently governed and professionally managed, with the adoption of the Code of Conduct being entirely voluntary. IAGES is expected to become operational by early 2025.
WGC’s Role and Market Outlook
The WGC will work to increase awareness of IAGES among retail consumers and finance the promotional campaign. Despite a 5% decline in gold demand during the June quarter of 2024, consumption is anticipated to improve in the latter half of the year due to a correction in local prices following a significant reduction in import taxes. According to a WGC report, this expected rebound will be a positive sign for the market.
Current Market Dynamics
On Monday, gold prices experienced a decline of over 2% during a volatile trading session, reflecting broader market trends. 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. 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.
Implications for the Jewellery Industry
The establishment of IAGES marks a significant development for India’s gold industry. For jewellers, this move promises a more transparent and trustworthy market, potentially leading to increased consumer confidence and higher sales. The voluntary nature of the Code of Conduct allows jewellers to gradually adapt to higher standards, while the audit framework ensures that those who commit to these standards are recognised and differentiated in the market.
