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GOLD and SILVER ticked higher
from Wednesday evening's 3-month lows in London on Thursday, going into the
long Easter weekend with gold trading 0.7% higher against the US Dollar.
Silver bullion rallied 2.2% from last night's low, but held one-third below
the 3-decade peak near $50 per ounce hit at Easter 2011.
The single Euro currency meantime slid near $1.3050 – dropping 3¢
for the week – after Wednesday's weak auction of new Spanish debt was
followed on Thursday by news of a drop in Germany's industrial output.
Losing 1.1% in gold bullion terms on Thursday, the Euro also dipped briefly
through CHF1.20 – the floor set by the Swiss National Bank last
September, and since defended by selling Francs to buy Euros in a bid to
maintain Switzerland's export competitiveness.
Ahead of the 4-day Easter weekend – in which London's gold trading
banks will stay closed until Tuesday – Spanish bond yields jumped
again, erasing the dip seen since the European Central Bank began lending
Eurozone banks more than €1 trillion in December.
The Dax index of German stocks today slid 0.9%,
extending its Easter-week drop to 3.2%.
Bullion analysts and professionals trading gold have "turned bearish for
the first time this year," according to Bloomberg's latest weekly
survey.
"Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline
next week and five were neutral," says the newswire, "the highest
proportion since Dec. 30."
The final week of Dec. 2011 saw gold begin a 17% rally over the following 9
weeks.
"We would not be surprised to see a move down in gold," says a note
from bullion-bank Scotia Mocatta today, "but
as concerns about Europe's debt are resurfacing, the downside may be limited
and safe-haven buying may soon return with vigour."
"Asian
interest in precious metals remained severely lacking [this morning],"
says Standard Bank's London team. "Nevertheless, there was enough
interest again...to keep prices relatively stable."
Over in Vietnam today, and "after a few dozen drafts" reports
TuoitreNews.vn, "the final decree on the management of gold trading
activities, a very important document with a strong influence on the domestic
gold market, has been signed by the Prime Minister."
Hanoi's new decree brings together Vietnam's piecemeal controls on gold
trading of 2011, banning the use of gold as money, such as making large
payments in real estate deals, as well as manufacturing or trading gold
without the requisite licenses.
Across in India – the world's No.1 private gold consumer, where a
3-week long strike by jewelers protesting against a
series of tax and duty hikes turned violent on Monday, with protesters
clashing with police in Mumbai and disrupting trains in Ghaziabad –
commercial banks now have to submit a raft of new monthly and twice-annual
reports to the Reserve Bank of India stating the volume and value of their
gold imports.
"We all know that gold is a deep-rooted part of our cultural
heritage," says Mehul Choksi,
chairman and managing director of Mumbai-based Gitanjali
Gems Ltd.
"[Gold] also serves as a highly liquid form of savings and a hedge
against inflation, having appreciated much faster than other asset classes.
"Naturally, we cannot expect this demand to suddenly disappear. And,
since India produces virtually no gold, demand has to be met entirely through
imports – legal or illegal!"
“The four per cent duty might be perceived as an irritant,"
counters T R Rustagi, former joint secretary of the
Central Board of Excise & Customs, also writing in the Business Standard.
"But arguably it cannot be the cause for smuggling.
"Its avoidance may not be lucrative enough for
smugglers to take risks," says Rustagi,
contrasting today's 4% duty with the 15% in place when India repealed its
Gold Control Act, liberalizing the legal import of gold bullion in 1990.
"We are expecting [finance minister] Pranab
Mukherjee to offer a feasible solution very soon," says Bacchraj Bamalwa, chairman of
the Gems & Jewellery Federation of India, warning that 1,000 crore Rupees in gold trading – equal to some $200m
– is being lost by the industry each day.
Reports
from the Bombay Bullion Association said this week that gold imports to India
have fallen by one-half so far in 2012 from the start of 2011.
India's second-largest jewelry business by
stock-market capitalization, Gitanjali's share
price has dropped 20% on the BSE since hitting a four-year high in early Feb.
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