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Gold prices rose to a five-week high as traders expect the Fed maintaining stimulus measures at a meeting this week.
From the beginning, gold fell by nearly 20 percent, as investors prefer higher yielding stocks and fear that the precious metal will lose appeal as a hedge against inflation , if the Fed will reduce the incentive program . Over the last two weeks gold rose by 6 per cent as the weak U.S. economic indicators may keep the Fed from cutting incentives. The Central Bank will hold a monthly meeting on Tuesday and Wednesday.
Traders are also watching demand in the physical market of Asia, where consumption fell after a sharp rise at the beginning of the year.
Premiums in India last week rose to a record $ 130 per ounce to the price in London , as the government imposed restrictions on the import of gold caused the deficit on the eve of the holiday season in early November.
Surcharges on the Shanghai Gold Exchange in relation to London prices turned negative on Monday , and then went up to $ 1 per ounce , compared with $ 30 in April and May.
The cost of the December gold futures on COMEX today rose to $ 1361.80 per ounce.
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