The reopening of Indian jewelry shops provided a boost for gold prices, says HSBC precious-metals analyst Jim Steel. Jewelers ended a 20-day protest against a doubling of the import tax on gold from 2% to 4% and introduction of an excise tax of 1% on unbranded gold jewelry.”Most jewelry stores have resumed operations on optimism that concessions will be made by the Indian finance minister, Pranab Mukherhee, to roll back the excise-tax portion of the tariff Hike,” Steel says. “The majority of India’s jewelry industry comprises of small shops and of the two tax increases, the excise tax is viewed as more onerous for smaller jewelry stores to comply with, according Indian merchants…Since the protest began, interest in alternative forms of bullion indicates the level of pent-up demand for gold and the resumption of the Indian jewelry market as shops reopen is gold bullish, we believe.” Gold also rose in the aftermath of Friday’s softer-than-forecast report on U.S. non-farm payrolls, suggesting some investors have increased expectations for another round of quantitative easing by the Federal Reserve, HSBC adds. As of 4:29 p.m. EDT, Comex June gold was $12.60, or 0.8%, higher at $1,642.70 an ounce.
Source; http://www.kitco.com/reports/kitcoNewsMarketNuggets20120409_a.html
