(Reuters) – Gold futures in the Indian commodity market lost some price value on Monday, but still traded range-bound. The demand on physical gold also eased more on previous government measures.
According to Reuters, Gold futures for August delivery on the Indian Multi Commodity Exchange (MCX) lost 0.32% of its value to be traded at 27,790 rupees per 10 grams. Gold continues to move sideways within a range of 26,961 to 28,288 rupees per 10 grams.
The Indian government measures took to reduce the current account deficit by curbing gold imports results started to appear. According to Reuters, the net gold imports fell from $135 million in the first half of May, to reach $36 million in the second half.
The Reserve Bank of India (RBI) made its last move in June 8th, after a series of other measures. The gold imports tax rate in India is currently set at 8% by the Indian government, after being just 2% last year. All these attempts are to reduce the country’s account-deficit from gold imports. India is the world’s top gold-consumer and importer.
Palaniappan Chidambaram, The Indian Finance minister, has hinted earlier of the government intention to take aggressive measures to curb gold imports. He stated that India can’t afford to continue this high level of gold purchase.
On the other hand, warnings from the return of smuggling gold to India were issued. The demand on gold was also weaker today due to weaker rupee and gold stocked from April. The wedding and festival season also ended and should start again in August.