India may increase duty on gold import
San Francisco, CA -- (SBWIRE) -- 01/11/2013 -- This most recent week saw Gold falling from its three-week high.
The slight drop was due to the higher value on the dollar, which is an alternative to the precious metal.
The actively traded gold for February delivery was at 0.36% higher at 31,018 rupees per 10 grams. It had hit 31,191 rupees last week due to the level seen on December 18.
"Uncertainty over Fed Quantitative Easing pausing by year-end and recovery in the US economy could be negative for gold," said Gnanasekar Thiagarajan, director with Commtrendz Research in Mumbai.
The euro, which had recently fallen, due to the Federal Reserve minutes, eased to 0.3% to $1.3034. That easement followed a falling to a three-week low of $1.2998 on trading platform EBS last Friday. Analysts believe it could stay consistent at the current levels until the European Central Bank meeting on Thursday of this week.
The dollar and gold possess a negative correlation, meaning that when one rises, the other is destined to fall (and vice versa). This reaction is due to the competing nature for funds globally that each possess.
For gold, selling is currently advised at 31,020 to 31,050 rupees, for a targeted value of 30,7000/30,600 rupees. The stop loss of 31,300 rupees, according to Subhrasom De, who works as an analyst with Karvy Comtrade in Hyderabad.
Recovering physical demand for the yellow precious metal is due to speculations of an import hike that could limit the downside.
India, which stands as the world's largest buyer of the metal, charges a 4% duty on the metal's imports, and the government has proposed making the imports of gold more expensive.
Silver for March stood at 0.35% higher than 58,188 rupees per kilogram.
The sale of MCX silver on rallies to 58,900, with a stop-loss of 59,400, with a target of 57,700, according to Thiagarajan.
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