Gold buying before the increase in Indian import duties takes effect

The gold price held near $1,655 per ounce Monday morning amidst a relatively quiet opening on Wall Street.  The price of gold climbed to as high as $1,664.89 in overnight trading, but relinquished its modest gains as the U.S. dollar turned fractionally higher.  Silver stabilized near unchanged at $32.56 per ounce alongside the gold price.

Gold has recovered from Friday’s bout of weakness, which was mostly as a result of an announcement that India would be raising the import duties on the metal in a bid to curb the softness in their current account. Perhaps the lower-than-expected US inflation figures on last Friday afternoon helped to provide some support into the weekend, as it kept hopes alive of further quantitative easing. Of course, support from the physical market was generous, as the relatively low prices as well as some opportunistic gold buying before the increase in Indian import duties takes effect. Physical market activity however has slumped  now, with bullion markets across India closed in protest against the increase in duties,

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