Sell gold around Rs 30,450-30,500 before Budget says Emkay

Ashok Mittal, CEO, Emkay Commodities

Ashok MittalEmkay Commotrade
What can be the impact of Budget on Gold?

Budget this year would be very crucial not only for the commodities markets, but also for other financial markets and for the economy as whole as it is a last budget before 2014 elections. It is expected to be the most rigorous budget this time as India is trying to reduce its fiscal deficit and trying to skip the major credit downgrade. The prime target is to focus on reducing the spending by the government which has already been started and has reached almost 9 percent from the initial target. 

Out of these spending cuts the prime focus would be to reduce the imports of Gold and Oil which has been increasing the Fiscal deficit of the country tremendously. Already steps have been taken to reduce the imports of Gold and Oil, however the major factor which will play role to determine the direction of gold prices would be the fluctuation in Indian rupee after reforms announcements and demand for Gold in India, checking its safe haven appeal and inflation hedge appeal.
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