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Gold dips as India moves to cut imports

Published 03/16/2012, 12:19 PM
Updated 03/16/2012, 12:22 PM
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Investing.com - Gold prices fell in U.S. trading Friday, dismissing weak U.S. data that would otherwise support the metal and weakened on news that India is making moves to curb imports to improve its current account deficit.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded down 0.32% at USD1,654.15 a troy ounce.

Gold futures were likely to test support at USD1,634.75 a troy ounce, Wednesday's low and resistance at USD1,782.75, Wednesday's high.

In India, a large buyer of physical gold, the government announced it was hiking import duties on gold in attempt to narrow its current account deficit.

The news sent the metal falling, shrugging off data out of the U.S. that would normally push gold prices up.

In the U.S., core inflation, industrial output and consumer confidence numbers came in weaker than expected, rekindling sentiments that the Federal Reserve may roll out stimulus measures to kick-start growth, which would weaken the dollar in the process.

Gold weakened in recent sessions after the Federal Reserve on Tuesday announced at a monetary policy meeting that it was leaving rates unchanged but made no mention of any need for stimulus tools, such as buying assets from banks to inject liquidity into the economy.

Fresh talk of stimulus policy, known as quantitative easing, should send gold rising once the market digests India's fiscal move.

Elsewhere on the Comex, silver for May delivery was down 0.70% and trading at USD32.50 a troy ounce, while copper for May delivery was down 0.46% and trading at USD3.88 a pound.







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