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Gold prices fell slightly on Friday, as the appetite for more risky assets fell, and investors began to invest their money in the strengthening of the dollar, after yesterday it peaked in the last four and a half months. But in spite of this the price of gold continues to hold near three-month high.
Gold futures rose more than 3% this week after the Fed minutes were given hope for another round of quantitative easing, but in the case, if the U.S. economy does not significantly improve.
Such a move is likely to have a positive effect on the value of gold, and will thus increase liquidity and keep long-term interest rates low.
Also today it was announced that the gold reserves ETFs, which issue securities backed by physical metal, reached a record 71.253 million ounces, and showed the greatest in the weekly inflow in absolute terms since February.
An important factor influencing the decline in demand for gold is the high price of gold in India, which is the largest consumer of the precious metal. International Convention on the gold in Hyderabad, dealers reported that import duties, which were raised earlier this year by 4%, can be further increased to 7%. Also, local dealers are reporting an increase of delivery of gold to India through informal channels.
The cost of the August gold futures on the COMEX is now 1667 dollars per ounce.
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