Even gold waits for 'Trump' moment

KOLKATA: Bullion dealers and gold traders have postponed fresh buying till January 20, when US president-elect Donald Trump will deliver his inauguration speech, looking for clues on the direction for the yellow metal though most expect Trump's policies would create more un certainty in the market.

Apart from the Trump factor, the country's gold trade is also keeping an eye on the Union Budget where the trade is expecting a reduction in import duty on gold. Gold in India attracts an import duty of 10%.

The trade is hopeful that the duty will be halved in the budget.

In the international market, gold prices rose on Tuesday to touch $1,213 per troy ounce.

“The Trump factor has been one of the major reasons why prices moved up. However, in last three years we have seen gold prices generally go up by 3% to 4% in January in dollar terms.This year it has gone up a bit more. The rally in gold prices is likely to continue for another two weeks till Trump settles down. By end of this month gold is expected to moderate,“ said Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra Bank.

Trump's campaign calls for tax cuts and infrastructure spending boosted US shares and the dollar and sparked a sell-off in Treasuries, but his protectionist statements have kept investors from adding risky positions.

Though Bhandari feels prices will moderate over the next few weeks, bullion dealers are not ready to take any chance right now on gold. “Physical buying of gold started declining from January 5 and this week there will be hardly any purchase. All eyes are on Donald Trump now.The wedding season purchase has already taken place so jewellers are not restocking gold,“ said Bullion Federation secretary Haresh Acharya.