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India Relaxing Gold Import Limits To Curb Smuggling
Posted March 21st, 2014
Los Angeles CA, Mar 21 (Tangible Investments) - by James O’Dell - Gold inched higher on Thursday, gaining $3.08 or 0.23 percent to close at $1,330.22 an ounce, after the markets knee jerk reaction on Wednesday to Fed Chair Janet Yellen's comments on interest rates, sparked a sharp correction in the metals while strengthening the dollar. The price of Silver eased $0.26 or 1.26 percent to close at $20.32 an ounce.
Chartists say a "golden cross" has developed recently in the gold chart, and it comes on the heels of a three month rally in the yellow metal. The golden cross occurred when the 50 day moving average crossed above the 200 day moving average. The technical signal suggests that prices could climb higher this year even as the Fed looks determined to continue tapering its massive quantitative easing (QE) program, say analysts.
Meanwhile, in India, a move is under way to boost gold imports and reduce the crushing premiums on the precious metal, by allowing a select group of private sector banks to purchase gold abroad. Investors see the action as a signal that the nations' draconian restrictions on the importation of gold may be abating. The Indian government raised import duties on gold while the Reserve Bank of India (RBI) imposed import curbs in an attempt to halt a rapidly escalating Current Account Deficit (CAD).
While the governments' actions did, in fact, reduce the CAD, it also triggered a surge in smuggling. India's Commerce and Industry Minister, Anand Sharma, is calling for a balanced approach on the matter and favors a review of curbs on gold import restrictions. "I feel [the need] for a review. I am not in favor of making it so difficult that it leads to [an] increase in smuggling," said Sharma.
During the first nine months of fiscal year 2013-14, nearly 700 cases of gold smuggling have been reported and authorities have seized 1,074.41 kg of gold, whereas, during the entire 2012-13 fiscal year, just 326.23 kg was seized.
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