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Gold Rallies as India May Relax Import Limit

May 19, 2014 at 10:27 by Vladimir Vyun

Gold rallied today after the India’s elections result published on Friday showed that opposition leader Narendra Modi won the vote, while his Bharatiya Janata Party won a majority, allowing it to form a government. Modi said to his supporters that he is going to change policies of the previous governments. Market participants speculated that he may relax (or perhaps even scrap altogether) the restrictions for gold imports. India is the second biggest consumer of the precious metal, and the limit on imports was affecting gold prices negatively.

Other precious metals followed gold in rally. The general market sentiment did not look particularly optimistic and precious metals are one of logical options for those traders who seek safety. On top of that, the European Central Bank and 20 other European central banks signaled that they are not going to sell substantial amounts of gold.

June futures for delivery of gold advanced $6.60 (0.51 percent) to $1,300.00 per troy ounce as of 10:13 GMT on COMEX today. July futures for silver gained $0.24 (1.25 percent) to $19.57 per ounce. Spot price for palladium added $15.79 (1.08 percent) to $1,480.73 per ounce and price for palladium increased by $5.41 (0.66 percent) to $820.85 per ounce.

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