Gold slips as India raises import duty

6 Jun

Gold edged to below USD 1,400 an ounce on Thursday as India, the world’s biggest bullion consumer, raised import duty on the metal by a third to reduce its current account deficit.

Fundamentals

Spot gold had dropped 0.25 percent to USD 1,399.36 an ounce by 0016 GMT, after gaining slightly on Wednesday as investors looked for safer assets after a private US jobs reading fell short of expectations.

US gold rose slightly to USD 1,399.10.

US private employers added 135,000 jobs in May, falling short of economists’ expectations, a report by a payrolls processor showed on Wednesday, curbing fears the Federal Reserve would soon cut its monetary stimulus.

India increased import duty on gold by a third to eight percent as the government seeks to halt a surge in demand after gold imports hit 162 tonnes in May – twice the monthly average of 2011 when they reached a record.

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The increase in import duty comes a day after the Indian central bank acted to force domestic jewellers to buy only on a cash basis.

China’s gold imports unexpectedly tumbled in April from record levels on supply constraints as demand surged after global prices hit two-year lows, although a recovery is likely in May.

The appetite for US American Eagle gold and silver bullion coins is still at unprecedentedly high levels almost two months after a historic sell-off in gold unleashed years of pent-up demand from retail investors, the head of the US Mint said on Wednesday.

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One Response to “Gold slips as India raises import duty”

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  1. Indian Rupee holds key to MCX Gold movements; futures may consolidate gains | Trading Tips Expert - June 11, 2013

    […] and third expectations of Barclays are anything to go by, then investors can assume that futures of gold may find some support, though it may not be of on a significant scale if one is allowed to think of […]

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