Gold settled down -0.25% at 26073 after Indian Commerce Ministry has proposed to cutback the prevailing high gold import duty structure and to implement necessary modifications to the existing 80:20 gold import procedures. Commerce Secretary while addressing a press conference after the meeting announced that the Ministry is in favor of reducing the gold import duty from 10% to lower levels. Considering the fact that the CAD is much lower when compared to previous year, the government has enough room to go for partial cutback of gold import duties. According to Rajeev Kher, since the country’s gold imports have plunged by 72% during May, it is the right time to ‘rationalize’ the duty on gold imports. The methodology of operating the controversial 80:20 scheme needs to be revised to the benefit of the gold industry. While Comex Gold continued its gains and stayed above 1260$ as bullion benefitted from the ECB rate cut wave, while the dollar remains under the pressure ahead of the statistics from the world's largest economy. Gold posted cautious gains on demand from bottom fishers, though many investors remained on the sidelines ahead of Thursday's key retail sales report. Also Consumer spending drives roughly 70% of U.S. economic activity, and an upbeat report could send gold prices falling by reminding investors that ultra-loose monetary policies that have supported gold since the 2008 financial crisis are on their way out. Technically market is under fresh selling and getting support at 25953 and below same could see a test of 25833 level, And resistance is now likely to be seen at 26196, a move above could see prices testing 26319.

Trading Ideas:

Gold trading range for the day is 25833-26319.

Gold dropped after Indian Commerce Ministry has proposed to cutback the prevailing high gold import duty structure

Gold prices have fallen notably in recent sessions due to expectations for U.S. recovery to continue to gain steam and prompt Fed to raise interest rates.

India needs to "rationalise" duty on gold imports, which plunged 72 percent in May