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Gold prices fall as India hikes import duty

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Singapore: 

Gold edged to below $1,400 an ounce on Thursday as India, the world's biggest bullion consumer, raised import duty on the metal by a third to reduce its current account deficit.

Fundamentals

* Spot gold had dropped 0.25 percent to $1,399.36 an ounce by 0016 GMT, after gaining slightly on Wednesday as investors looked for safer assets after a private U.S. jobs reading fell short of expectations.

* U.S. gold rose slightly to $1,399.10.

* U.S. private employers added 135,000 jobs in May, falling short of economists' expectations, a report by a payrolls processor showed on Wednesday, curbing fears the Federal Reserve would soon cut its monetary stimulus.

* India increased import duty on gold by a third to 8 percent as the government seeks to halt a surge in demand after gold imports hit 162 tonnes in May - twice the monthly average of 2011 when they reached a record.

* The increase in import duty comes a day after the Indian central bank acted to force domestic jewellers to buy only on a cash basis.

* China's gold imports unexpectedly tumbled in April from record levels on supply constraints as demand surged after global prices hit two-year lows, although a recovery is likely in May.

* The appetite for U.S. American Eagle gold and silver bullion coins is still at unprecedentedly high levels almost two months after a historic sell-off in gold unleashed years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday.

Copyright Thomson Reuters 2012

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