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Gold Slumps on NFP, India’s Import Duty

July 5, 2019 at 17:24 by Vladimir Vyun

Gold slumped today after the release of US nonfarm payrolls. Most other metals joined the decline, with the exception of palladium. US employers added 224,000 jobs in June versus the consensus forecast of 162,000. The report made the US dollar surge and speculators trim bets on interest rate cuts from the Federal Reserve. The CME FedWatch page was showing that markets no longer price in a 50 basis point cut this month and chances for at least some cut were no longer 100%. Yet currently, it looks like bets have returned to about where they were before the report, with a 100% chance for a cut by at least 25 points and about a 6% chance of a 50 point cut.

Another negative factor for the market was the increase of import duties on gold and other precious metals by India today. That was a total surprise to market participants as Anantha Padmanabhan, chairman of All India Gem and Jewellery Domestic Council, told Reuters:

This is a shocking move. We were expecting reduction in the custom duty.

Experts are worried that the move will result in smaller retail demand and increase of smuggling.

Futures for delivery of gold in August dropped 1.44% to $1,400.50 per troy ounce as of 17:17 GMT on COMEX today. September contract for silver tumbled as much as 2.09% to $15.02 per ounce. Spot price for platinum tanked 3.32% to $807.15 per ounce, but palladium manged to gain 0.32% to $1,570.06 per ounce. Copper for delivery in September subtracted 0.86% to $2.66 per pound.

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