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The decline that gold was suffering from has come to an end for the time being, with support being found around the $1280 level. The intraday squeeze down to $1277 on Tuesday 1 April was just a whisker away from the 100-day moving average, and represented an 8.25% fall from the mid-March highs.
One of the driving forces that helped halt the precious metals fall was the tax deadline Japanese investors had to contest with. This is the first time the Japanese government has altered the national sales tax since 1997, increasing it from 5% up to 8%. Because of this, it has triggered a flood of retail buyers ahead of its implementation. Also adding to the fundamental picture, five more Indian banks have been given permission to import gold. This added liquidity should see premiums fall and supply double.
As gold appears to have found some support that correlates to its previous high, seen at the tail end of January, I would envisage it making a fresh effort to retake the $1300 level. Once its momentum has been regained, the 50-DMA just above the $1320 level would be the next hurdle to clear.