Gold up on softer dollar; India budget eyed for import duty cut

Gold edged higher for a second straight session on Thursday, helped by a weaker dollar and as minutes of the Federal Reserve’s recent policy meet gave no indication of an early hike in U.S. interest rates. Markets were also eyeing developments in the second-biggest consumer India, where the new government is expected to cut a record high import duty on gold at the budget to be presented today.
Spot gold rose 0.1 percent to $1,327.05 an ounce by 0018 GMT, after gaining 0.5 percent in the previous session. The Fed has begun detailing how it plans to ease the U.S. economy out of an era of loose monetary policy, indicating it will end its asset purchases in October and appearing near agreement on a plan to manage interest rates in the future, according to minutes of the June policy meeting.
Gold had been under pressure since last Thursday when a strong U.S. jobs report stoked speculation that the Fed could increase rates sooner than expected. A hike would encourage investors to withdraw money from non-interest-bearing assets such as gold.
India is likely to cut its gold import duty to 6 percent from a record 10 percent in Thursday’s budget, leading to a rise in imports in the second half, a senior official at the country’s biggest gold trade group said.
Any jump in imports from India would likely underpin gold prices. The London Metal Exchange and technology firm Autilla teamed up on Wednesday to launch a last-minute bid to run the new global silver price benchmark in the closely fought contest to replace the 117-year old London “fix.”
Platinum and palladium continued to gain amid fears over supply issues from major producer South Africa. Palladium rose for a 14th straight session to trade near its highest since February 2001.
Source: Reuters
Source:Bullion Bulletin

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