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Gold price in Mumbai spot market has crashed today after yesterday night’s RBI announcement to relax gold import norms and allowing more players to import. Prices are down over 3% following crash in spot premia from $80 dollars per ounce yesterday morning to little over $20 today which had also tested $10 per ounce in afternoon.

In the evening trade however premiums increased to $35-40 per ounce as banks had not indicated huge imports in next few days. Actual flows could take some more days to come from banks and export houses. as a result spot prices have have not fallen to much but prices in MCX futures have corrected sharply.

Gold price in Mumbai’s spot market today fell by Rs. 525 little less than 2% to Rs.28, 200 Per 10 gram compared to Rs.28,725 yesterday. International price was steady around $1295-$1300 per ounce. MCX gold june futures have lost Rs.1000 per 10 gram from yesterday’s high and were trading today around Rs.27,260.

More interestingly, “far month August contract was at a discount of Rs.800 per 10 gram from June before relaxations which is now trading around only Rs.125 lower to June contract. This is because delivery reated concerns are grossly easing and hangover of that is not seen in futures prices anymore,” said Ajay Kedia, director, Kedia commodities.

However it is not only price that matters as allowing banks to provide gold on lease to jewelers is also a big boost to jewellery firms. Stock prices of most jewelers are up today from 6-20%. They see increase in business due to higher availability of gold and lower prices could further boost demand apart from huge saving in interest costs and reduction in debt due to availability of gold on loan.

Next big thing that could happen will be import duty cut may be budget which is likely to be presented in first half of July. Market expect 2% duty cut.

Yesterday RBI allowed star and premier trading/export houses to import gold and analysts believe their annual imports will be higher by 120-140 tonnes at least in 2014-15 which could bring total gold import for the year around 750-775 tonnes through official channels and will add $10 billion to gold import bill from $28 billion in 2013-14 to $38 billion this year. Sonal Varma, India economist, Nomura Financial said, “we expect gold import will surge this year due to relaxation and over all cheaper prices. We see gold import around 900 tonnes in 14-15 while import bill around $38 billion.”

However market participants say, import duty that is 10.3% is also expected to come down by 2% in the budget. Kedia said, their expectation is that duty could be lowered 2-3% in budget and during the year similar drop may happen again leading to overall 5-6% drop in duty in a year’s time.

Somasundaram PR, Managing Director, India, World Gold Council said, “RBI’s decision to permit the nominated banks which will increase official gold supply and decision to give Gold Metal Loans (GML) to domestic jewellery manufacturers out of the eligible domestic import quota of 80% will also relax some cost pressures that the jewellers were facing in past few months”.

Gold traded during the last week consistently and on a small scale, with some experts predicting low precious metal sharply to levels close to $ 1250, but the gold tried to prove near the levels of $ 1,300 per ounce, and especially with the decline of the dollar against other currencies and the absence of U.S. data, with the beginning of the last week, touching the level of $ 1307 and then returned to drop to the level of 1290 dollars to form a line as the lowest level of weekly supported

But during the next week, waiting for tomorrow, Monday, the issuance of the gold index in the United States, which is likely to decide its direction for the coming days and on Wednesday speech softens and the minutes of the meeting of the FOMC, which is likely to draw the price, and through Thursday will be issued Index Existing Home Sales, which is expected to be released in positive support for the greenback on Friday, the index also new home sales will be released green, making the expectations of experts, up until the last gold this week.

Gold prices dropped on Friday registered the second weekly decline in a row by sales raised sharp rise in the U.S. dollar and expectations of analysts that the Federal Reserve may begin to raise interest rates next year .

And also landed the platinum group metals after news that some of the mines in South Africa – the largest producers – began to resume work , which may indicate an early end to strike action .

And received support gold prices earlier when the growing political tensions dimensions traveled Russian President Vladimir Putin to the Crimea to attend the reviews in remembrance of the Soviet victory in World War II on his first visit to the peninsula since annexed by Moscow from Ukraine .

But the precious metal was pressured with continuing sharp decline of the euro from its highest level in two and half years against the dollar after President Mario Draghi noted the ECB on Thursday that the bank is ready to take additional measures to facilitate cash .

The price of gold for immediate sale 0.1 percent, to 1287.40 dollars an ounce in late New York trade , ending the week on a loss of 1 percent .

And U.S. futures fell 10 cents gold settled at a record 1287.60 dollars an ounce at the settlement .

Silver fell 0.3 percent to 19.11 dollars an ounce .

Platinum fell 0.6 percent to 1424.99 dollars an ounce , while palladium fell 0.3 percent to 796.60 dollars an ounce

Gold fell from $ 1,300 on Thursday after recording the biggest drop in three weeks , with little appeal as a safe haven by the signs of easing of tension in Ukraine .

Rose spot price of gold slightly to 1291.55 dollars per ounce, after losing 1.4 per cent on Wednesday , in the biggest drop for a single day since 15 April . The U.S. gold futures settled down after a similar decline last night .

And I got silver in online transactions 0.3 per cent to 19.24 dollars an ounce , while platinum rose 0.3 per cent to U.S. $ 1432.75 , and palladium rose 0.5 per cent to hit 799.75 dollars an ounce .

Most of the rise of gold seven per cent this year to geopolitical tensions over Ukraine . Gold is seen as an investment safe in times of economic uncertainty and political .

The analyst said the ” bank or . CNN . Me. C ” Barnabas committees that “the outlook for gold will adopt from now on developments in Ukraine ,” he said, adding : “We are still betting on the decline in gold prices, we expect that the total price $ 1150 at the end of the year not to burst the situation in Ukraine ” .

He called Russian President Vladimir Putin’s pro-Moscow separatists in Ukraine to postpone the referendum on secession by only five days of the vote , announcing the withdrawal of Russian troops from the Ukrainian border .

Gold gave up initial gains and fell about 1.5 percent on Wednesday as investors profit-taking after it urged Russian President Vladimir Putin separatists in Ukraine to postpone the referendum and announced the withdrawal of Russian troops from the border area between the two countries .

Putin called pro- Moscow separatists in eastern Ukraine to postpone the referendum on secession just five days before the due date for performing in a move likely to Ukraine away from the brink of disintegration. He also announced re Russian troops from the Ukrainian border .

But the White House said he did not see any signs that Putin withdraw his troops from the border with Ukraine and said he wanted to cancel the referendum on secession , not just postponed.

And exposure to the precious metal is also pressure from the comments of Janet Yellen head of the U.S. Federal Reserve confirms the belief that the U.S. central bank will end its program of asset purchases in the fall of this year as expected .

The price of gold fell for the cash sale of 1.4 percent, to 1288.36 dollars an ounce ounce ) by the time 1750 GMT, heading towards recording the biggest loss for one day in three weeks .

The futures contract dropped U.S. gold market in COMEX 19.90 dollars an ounce to U.S. $ 1288.70 .

Over the past three sessions, gold rose about 3.5 percent to 1314.70 dollars earlier on Wednesday on fears that a confrontation between pro-Russian separatists and government forces in Ukraine could immerse the country into war .

Among other precious metals followed the example of silver to gold fall 1.0 percent to 19.29 dollars an ounce , while platinum fell 1.5 percent to 1429.25 dollars an ounce and palladium fell 2.5 percent to 793.90 dollars an ounce