{"id":41164,"date":"2013-08-20T10:47:50","date_gmt":"2013-08-20T14:47:50","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=41164"},"modified":"2013-08-20T10:47:50","modified_gmt":"2013-08-20T14:47:50","slug":"high-prices-new-import-rules-push-indias-gold-demand-to-dubai-spore","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/08\/20\/high-prices-new-import-rules-push-indias-gold-demand-to-dubai-spore\/","title":{"rendered":"High Prices & New Import Rules Push India’s Gold Demand to Dubai & S’pore"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a>
\nTuesday, 20 August 09:05 EST<\/strong><\/p>\n

The DOLLAR PRICE of gold briefly jumped back above $1370 per ounce Tuesday lunchtime in London, before drifting lower as world stock markets fell hard with commodities.<\/p>\n

\u00a0Reversing all of an earlier 1.2% drop \u2013 which analysts had called “profit taking” \u2013 spot gold prices spiked less sharply for non-Dollar investors as both Sterling and the Euro jumped to two-month highs.<\/p>\n

Major government debt prices crept up, nudging bond yields lower from Monday’s new multi-month highs ahead of Wednesday’s release of minutes from the US Federal Reserve’s latest policy meeting.<\/p>\n

“The gold price is holding up well despite the US 10-year government bond yield moving [higher] from the start of last week,” says a note from bullion dealers Standard Bank.<\/p>\n

\u00a0“This is encouraging.”<\/p>\n

\u00a0Gold prices “have been rising within an upward sloping channel for a month,” says a technical note from Soci\u00e9t\u00e9 G\u00e9n\u00e9rale.<\/p>\n

\u00a0“Yesterday’s close…suggest[s] gold should pause at $1347.”<\/p>\n

\u00a0“We feel that there’s\u00a0at least a technical bounce here<\/a>” in gold prices, J.P.Morgan analyst John Bridges told CNBC on Monday.<\/p>\n

\u00a0“If you’re still uncertain about whether the financial crisis is truly over, then having some gold in the portfolio makes a lot of sense.”<\/p>\n

\u00a0Following a report by Reuters meantime, a note from London bullion market maker HSBC adds that gold prices could also “find support from optimism that\u00a0India’s bullion imports may resume<\/a>.”<\/p>\n

\u00a0India last week clarified its latest gold import restrictions, encouraging dealers to re-stock for the traditionally strong autumn festival season.<\/p>\n

\u00a0New data this week show India’s gold imports rising in July despite the new measures, reaching $2.9 billion from $2.5bn in June.<\/p>\n

\u00a0With the Rupee crashing to new all-time lows on the currency market, however, gold prices are near record highs for Indian households. So today’s Hindu festival of Raksha Bandhan is\u00a0seeing only weak demand<\/a>, according to the\u00a0Wall Street Journal.<\/p>\n

\u00a0New Delhi last week also raised gold import duty to 10% \u2013 up from 1% just 18 months ago \u2013 and banned the import of\u00a0gold coins<\/a>\u00a0and medallions entirely.<\/p>\n

\u00a0It further extended a rule demanding that 20% of all new gold imports be set aside for re-export to include unrefined dore, thereby affecting\u00a0India’s domestic gold refining industry<\/a>\u00a0\u2013 originally a beneficiary of the government’s attack on gold bullion imports<\/p>\n

\u00a0“We believe the currency will remain under pressure until the current account deficit narrows meaningfully, or capital inflows accelerate due to an improving growth outlook,” says credit ratings agency Moody’s.<\/p>\n

\u00a0“The current macro context and consequently the monetary policy challenges are similar to those in FY1992,” says Barclays Bank, flatly contradicting Indian prime minister Manmohan Singh, who was involved in the reforms which followed India’s balance of payments and currency crisis of two decades ago.<\/p>\n

\u00a0One major reform was then the liberalization of India’s strict gold import rules.<\/p>\n

\u00a0“Major banks including HDFC Bank and Axis Bank have begun to raise lending rates,” reports\u00a0India Express\u00a0today, “which means people planning on festival loans will have to do a rethink.”<\/p>\n

\u00a0“Opportunity exists for Dubai\u2019s jewellery retailers,” says Zawya online. “Already a substantial gap has built up between gold prices here and what the same would cost in India.”<\/p>\n

\u00a0Press reports in both Dubai and Singapore today say local gold dealers are seeing a sharp increase in buying by Indian visitors.<\/p>\n

\u00a0“Speculative buying [in India] has picked up,” says Surender Jainani of the Bombay Bullion Association, “in anticipation of a further rise in gold prices…since the festival and marriage season starts soon.”<\/p>\n

Adrian Ash<\/strong><\/span><\/a><\/p>\n

BullionVault<\/strong><\/span><\/a><\/p>\n

Gold price chart, no delay | Buy gold online<\/strong><\/span><\/a><\/p>\n

 <\/p>\n

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich or Singapore for just 0.5% commission.<\/p>\n

 <\/p>\n

(c) BullionVault 2013<\/p>\n

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events \u2013 and must be verified elsewhere \u2013 should you choose to act on it.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

London Gold Market Report from Adrian Ash BullionVault Tuesday, 20 August 09:05 EST The DOLLAR PRICE of gold briefly jumped back above $1370 per ounce Tuesday lunchtime in London, before drifting lower as world stock markets fell hard with commodities. \u00a0Reversing all of an earlier 1.2% drop \u2013 which analysts had called “profit taking” \u2013 … <\/p>\n

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