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1 Oct 2013
Gold dives on Indian tariff hikes
FXstreet.com (London) - Gold is plummeting, smashing through pre-taper speculation levels and struggling to find resistance. It is currently at USD1,290/oz, shedding over 2.8 percent so far today from a high of USD 1338.70/oz.
The drop has been driven by India hiking its tariffs on gold imports today. The Central Board of Excise and Customs (CBEC) increased tariffs from $432 per 10 grams to $436. At the same time it reduced silver tariffs from $736 per kg to USD702 per kg.
The tariff hike comes as the Indian government moves to curb gold imports to contain its current account deficit, targeting a cap of USD70bn.
It is the third time this year that the government has hike duty and It is estimated that the measures may curb Indian gold imports by 5.2 percent.
In 2012, India accounted for 20 percent of global demand, importing 800 tons.
No fears
Despite the US government shutdown following the inability of Congress to reach an agreement to extend the debt ceiling, gold hasn't received support on haven flows.
With the S&P climbing, and the dollar coming under moderate selling, the markets seem to be perversely heading to the “safety” of fiat currency and equities. The market seems to be pricing in a short term shutdown, with no tangible panic moves despite the duo of US fiscal concerns and European political instability.
The drop has been driven by India hiking its tariffs on gold imports today. The Central Board of Excise and Customs (CBEC) increased tariffs from $432 per 10 grams to $436. At the same time it reduced silver tariffs from $736 per kg to USD702 per kg.
The tariff hike comes as the Indian government moves to curb gold imports to contain its current account deficit, targeting a cap of USD70bn.
It is the third time this year that the government has hike duty and It is estimated that the measures may curb Indian gold imports by 5.2 percent.
In 2012, India accounted for 20 percent of global demand, importing 800 tons.
No fears
Despite the US government shutdown following the inability of Congress to reach an agreement to extend the debt ceiling, gold hasn't received support on haven flows.
With the S&P climbing, and the dollar coming under moderate selling, the markets seem to be perversely heading to the “safety” of fiat currency and equities. The market seems to be pricing in a short term shutdown, with no tangible panic moves despite the duo of US fiscal concerns and European political instability.