Gold prices in Mumbai gray market jumped more than one percent to Rs 28,400 per 10 gm on Tuesday midday monitoring of international rates, which rose to a 3-month high of $ 1332.10 an ounce (32 g), as a result of escalating of violence in Iraq, and a weaker dollar.
However, the demand for the yellow metal at households in India continued to perform weakly in front of an early cut import duties. Government collects taxes of 10% on imports of gold bullion traders and consumers expect decreased by 03.02 percentage points when Finance Minister Arun Jaitley unveils budget for FY15.
The impetus for gold remains positive. India is the largest importer of gold, purchasing around 800 tonnes of gold annually on average. A weak dollar and the threat of rising inflation tend to raise the price of gold.
A weak dollar generally benefits gold, as it boosts productivity the metal’s appeal as an alternative asset and urges commodities denominated in dollars expensive for holders of other currencies.
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