The immediate outlook for gold has been dominated by speculation about how soon the US Fed will begin to reduce its stimulus measures and movements in the US$. Latest indicators for the US economy paint a mixed picture, but a tapering of quantitative easing in September or October has not been ruled out.
The rupee has plunged in recent weeks, raising US$ import costs and hurting Indian jewellery demand. Policymakers in New Delhi hiked the import duty on gold to a record 10% on August 13 in an attempt to rein in the country’s burgeoning current account deficit.
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