Traders rush to buy gold ahead of budget

By Rujun Shen

SINGAPORE | Wed Feb 20, 2013 2:42pm IST

(Reuters) - Indian traders rushed to buy gold on worries the government may take more steps to curb soaring imports of the precious metal when it presents its budget later this month, while Chinese buying eased from levels seen earlier in the week.

Alarmed by a mounting current account deficit, India moved to rein in its gold imports -- second only to oil in value -- by raising duties to 6 percent from 4 percent in January.

But traders snapped up supplies ahead of the duty, sending India's gold imports last month to their highest in 1-1/2 years and undermining the government's efforts to control the ballooning deficit that hit a record 5.4 percent of gross domestic product in July-September.

"Most people in the market are concerned about policy changes in the budget," said a Mumbai-based dealer.

"Some sort of measures to curb gold imports can be there, that's why bullion players, especially jewellers, are increasing their stock levels."

more... http://in.reuters.com/article/2013/02/20/india-union-budget-2013-asia-gold-idINDEE91J05D20130220