Uncertainty across the global markets led to a quiet week for precious metal trading but the prospect of a reduction in gold import duty in the key Indian market has led to renewed expectations.
The Reserve Bank of India has proposed reducing the levels of duty on gold imports in a key reform that would reverse the previous government's policy. And with the Indian wedding season about to begin Dealing Manager, Kelly-Ann Kearsey, said that the easing of restrictions in a key gold consumer market was a promising sign.
She said: 'The rate of duty on gold imports was increased by the previous government to 10% in 2013, but a key policy of Narendra Modi's BJP party has been to reduce that rate.
That would lead to an increase in demand in what is a key gold consumer market, and the timing with the Indian wedding season running from March to July looks to be perfect.'
The news comes just as uncertainty in global markets – particularly over the question of Greece's negotiation with EU partners over their continuing financial problems, and the impact that outcome will have on the position in Spain and Italy – has led to a quiet week for precious metal trading.
'Volumes are down this week for a variety of reasons, mostly down to uncertainty but also down to Chinese New Year which has slowed down activity,' said Kelly-Ann.
'We have seen positive figures in activity within our Canada and Singapore vaults, and there are positive signs from the US Federal Reserve about interest rates as they take a more dovish approach.
'In the next week we're expecting more data from the US on existing home sales, consumer price index and consumer confidence.'
Week on week price performances
19/02/15 16:00. Gold down 1.1% to $1,208.50, Silver fell 2.3% to $16.43, Platinum lost 2.9% to $1,166.95 but Palladium increased 1.4% to $780.05.
NOTES TO EDITOR
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