Gold’s London AM fix this morning was USD 1,649.00, EUR 1,263.02, and GBP 1,049.05 per ounce.
Yesterday's AM fix was USD 1,646.75, EUR 1,262.26and GBP 1,052.57 per ounce.
Gold closed in New York yesterday at $1,657.30/oz. Gold tumbled in Asia and its low hit $1,645.86/oz. and high $1,664.71/oz. and is now trading in Europe at $1,646.73/oz.Cross Currency Table – (Bloomberg)
Gold traded lower on Friday, moving towards a third straight week of losses on the backdrop of a recovering US economy, which prompted investors to put their money in other vehicles, while India’s plan to double the import duty on gold bullion erased some early gains.
On news that Finance Minister Pranab Mukherjee proposed to double the 4% customs duty on gold from April 2012, physical dealers saw some panic buying from India, the world’s largest gold consumer.
In January, India raised the gold import duty 90% and doubled the tax on silver as the government is struggling with a growing fiscal deficit and looked to increase revenues. Growing subsidies for fuel and food have left the government struggling to meet its budget target.
Indian investors, who are the largest consumer group of gold in the world, rushed to buy gold in advance of the government’s plan to increase the 4% customs tax in April 2012. The resulting gains where then eroded by stronger than expected US economic growth numbers.
Market participants will watch US consumer prices data which come out at 12.30 GMT.
Bloomberg’s survey of 26 bullion analysts show 13 expect prices to rise next week and 4 were neutral, the lowest ratio since Jan. 20. Hedge funds lowered their bets on a rally by the most since August 2008 in the week ended March 6, Commodity Futures Trading Commission data show. Bullion prices dropped to an 8 week low on March 14, 15% below September’s record, and have now dipped beneath the 200- day moving average, a sign of more declines to some market participants.