Both precious metals climbed higher after India’s central bank cut interest rates for the first time in three years. In a surprising move, the bank cut rates by 50 basis points in order to boost growth. The Reserve Bank of India cut its policy repo rate to 8 percent. RBI Governor Duvvuri Subbarao explained, “It must be emphasized that the deviation of growth from its trend is modest. At the same time, upside risks to inflation persist. these considerations inherently limit the space for further reduction in policy rates.
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The RBI increased rates 13 times between March 2010 and October 2011 to contain price pressures, but the latest inflation report provided officials more room to ease. The nation’s wholesale price index increased 6.89 percent in March from a year earlier, a decrease from February’s 6.95 percent rise.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) traded flat, while the iShares Silver Trust (NYSEARCA:SLV) edged .70 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) both increased 1.13 percent and .23 percent, respectively. Silver investments such as Silver Wheaton (NYSE:SLW) and Endeavour Silver Corp. (NYSE:EXK) jumped 1.79 percent and 1.37 percent, respectively.
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