The Indian finance ministry announced yesterday that they will be reconsidering the import restrictions imposed on gold by March end. The Finance Minister of India, Mr. P. Chidambaram on Monday informed that the Govt. will be taking actions regarding the current gold import restrictions soon.
The gold price came within reaching distance of $1,280 this morning before falling back 0.2%. The $1,279.61 price level is the highest the yellow metal has reached in two months and comes after the longest rally in nearly a year-and-a-half. The gold price is likely to see some swings during a week of heavy economic releases and the FOMC meeting.
After what looked like a miserable start to the day gold climbed to a six-week high yesterday and settled about 2% higher at $1,262, above the key resistance level of $1,260. This was in part thanks to short covering and some technical buying, however news on both India and China’s gold markets contributed to the boost.
Some of the world's growing middle classes and the wealthy are moving their gold away from increasing financial repression in the western world to the Asian capitals of Hong Kong and Asia’s emerging precious metals trade hub, Singapore.
The LBMA and the GFMS expect an average gold price of $1,219 and $1,225 in 2014. This compares with an actual average price of $1,411 last year and a gold price of $1,204.50 for London Gold Market PM Fixing as of Dec. 30, 2013.
In a letter written to the Indian government, the Congress Party Chief Sonia Gandhi has called for easing of gold import duty and the controversial 80:20 rule which stipulates that 20% of all gold imports must leave the country as exports.