Gold trades slightly higher after India-induced tumble
Published Jun 04, 2013 08:20PM ET
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery inched higher by 0.01% to USD1,397.35 per troy ounce in Asian trading Wednesday after settling down 1.11% at USD1,396.25 a troy ounce in U.S. trading on Tuesday.
Gold futures were likely to test support USD1,384.45 a troy ounce, Friday's low, and resistance at USD1,416.35, Monday's high.
Gold came under pressure on news that India, the world's largest consumer of gold, may restrict imports to narrow a record-wide current account deficit.
The Reserve Bank of India, that country’s central bank, extend an import ban on banks to trading houses and related entities.
Amid falling prices, Indian imports of gold jumped to 162 tons last month from 142 tons in April. It is expected the import ban will cut imports to 50-100 tons this month.
The dollar strengthened on Tuesday after Japanese government sources told Reuters that Tokyo may direct public pension funds, which control the dollar-equivalent of USD2 trillion in assets, to increase investments in equities and overseas assets.
Expectations of rising interest rates in the U.S. are also seen as weighing on gold because real interest rates, should they turn positive, would make gold ownership less attractive, particularly because bullion offers no interest or dividends.
Elsewhere, Comex silver for July delivery rose 0.23% to USD22.460 per ounce while copper for July delivery fell 0.19% to USD3.363 per ounce.
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Written By: Investing.com
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