The Reserve Bank of India said yesterday it would be mandatory for gold buyers to set aside 20 percent for re-exports as jewelry in a bid to cut a record current-account deficit. The country has doubled a tax on inbound shipments to 8 percent this year. Imports may tumble 63 percent to 175 metric tons in the second half from a year earlier, said Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation.
“The restrictions on Indian imports is a further blow to physical demand,” Marc Ground, a commodity strategist at Standard Bank Plc in Johannesburg, said in a telephone interview. “Gold continues to remain vulnerable to the downside.”
Gold futures for December delivery fell 0.2 percent to settle at $1,335.20 an ounce at 1:39 p.m. on the Comex in New York. Yesterday, the price jumped as much as 3.6 percent to $1,340.50, the highest for a most-active contract since June 20.
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