$1,600/oz has been Gold Support since fall from $1,900/oz
Gold selling intensified in March and 1st week of April as Indian gold buyers went on strike against the bullion tax increase in India. The strike just came to end this week and the spot price of Gold quickly started to rebound like clockwork.
Physical Gold Demand Expected To Pick Up As Indian Festival Approaches, Jewelers Strike Ends
10 April 2012, 9:36 a.m.
By Allen Sykora
Of Kitco News
(Kitco News) - Physical demand for gold is expected to pick up again now that Indian jewelry shops have ended a strike, although it remains to be seen how strong this demand will be and whether the protests will resume next month, analysts said.
A majority of India’s jewelers closed their shops for roughly three weeks to protest a doubling of the import tax on gold from 2% to 4% and introduction of an excise tax of 1% on unbranded gold jewelry. Jewelers reopened late last week when Finance Minister Pranab Mukherjee reportedly offered assurances he would consider a rollback of the excise duty.
“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,” said Jim Steel, analyst with HSBC.
India, along with China, is one of the world’s two largest consumers of gold. The end of the strike comes at a key time, with the approach of India’s gift-giving Akshaya Tritiya festival on April 24.
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