MCX Gold futures are consolidating in a tight range today as markets got over the euphoria generated by the hike in local gold import duty. The global prices are reluctant to break above $1700 per ounce levels and this is likely to keep the domestic futures under check. The COMEX Gold futures drifted lower after testing the 100 day Exponential Moving Average for a second day and mimicked a same pattern today as well. The counter trades at $1693.20, up $6.20 per ounce on the day. India has raised the import tax on gold by 2% to 6% to curb purchases and rein-in a ballooning fiscal deficit. This is the third consecutive year the government has proposed a hike on the Gold import duty. The government also proposed to link gold exchange-traded funds or ETFs and the gold deposit schemes of banks to encourage investors to use existing gold stock in the domestic market.The Bank of Japan has announced a much-anticipated change in its policy stance, adopting a target to achieve a 2% increase in consumer prices and saying it will now conduct its asset purchases on an “open-ended” basis to boost its monetary stimulus. This effectively means further quantitative easing form the second largest economy in Asia. This was already factored in by markets as the recently elected administration of Prime Minister Shinzo Abe had called for the central bank to act more aggressively to spur growth and end an era of falling prices.The US dollar is hovering around 1.3340 mark against the Euro, largely unchanged on the day and consolidating around these levels. The Asian equities are trading mixed but a positive close on DOW yesterday has ensured that the undertone is stable. MCX Gold futures had jumped in intraday moves yesterday evening and added nearly Rs 200 per 10 grams on the day. The spot prices have also shot up nearly Rs 300 on reports of duty hike. MCX Gold is quoting at Rs 30740, down Rs 17 per 10 grams on the day as the Rupee edged up towards its three month highs yet again given the firm undertone in local stocks.
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