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After three weeks of a sustained fall in prices, gold hit $1,200/ounce in global markets on Tuesday, following Japanese Prime Minister Shinzo Abe calling for snap elections in that country on December 21. The commodity recorded a rise of one per cent from its previous close on brisk buying after Abe dissolved the Japanese parliament.
In intra-day trading, gold hit $1,204/oz but slipped on profit booking to trade at $1,197.5 in London. Silver rose $0.22 to trade at $16.27/oz.
In Zaveri Bazaar here, gold gained Rs 150 to close at Rs 26,750/10g amid speculation the government might tighten the 80:20 gold import norm (importing gold on the condition that 20 per cent of the import be exported) to narrow the country’s current account deficit.
A recent relaxation in the 80:20 norm, through which more units were allowed to import gold, led to a sharp rise in gold and silver imports in October. Data compiled by the Ministry of Commerce showed India’s gold import bill for October stood at $4.178 billion, up 280 per cent year-on-year. Silver imports rose 136 per cent to $686 million.
The import bill for gold and silver was the highest since May 2013. Apart from festive season demand, low prices of both gold and silver are also contributing to the increase in imports.
