Gold prices edged higher on Friday as investors bet the Federal Reserve would not rush in shifting to tighter monetary policies.
The most actively traded contract from April delivery climbed 0.3% or $3 settling at $1,213.10 per troy ounce on the Comex Division of the New York Mercantile Exchange.
In the recent days, prices moved higher after the Federal Reserve Chairwoman, Janet Yellen told lawmakers that while the central bank is close to raising the interest rates, such a move is dependent on the US economic data.
The Wall Street Journal quoted Frank McGhee, head of precious metals dealer with Integrated Brokerage Services LLC as having said, “The continued indication that the Fed’s not going to be quick to move has put a bid back into the market, but that will evaporate the moment that sentiment changes.”
Gold does not earn dividends or interest and it is expected to struggle to attract investors away from such haven assets as treasury bonds are rising.
Gold might get a boost from widely expected cuts to India’s gold imports taxes, according to Julian Jessop, head of commodities research at Capital Economics. India is yet to release its budget over the weekend and market participants expect the top gold consumer of the world to ease gold import duties as part of the announcement.
Mr Jessop said that changes to the tax regime of India on god imports is likely to be small and will have a limited impact on its demand, which is still likely to impact positively on sentiment.
Mr Jessop added, “As a result, some pent-up demand will return, we expect strong Indian demand to contribute to a recovery in global prices, to $1,400 per ounce by end of 2015.
Bloomberg quoted Mehul Choksi, chairman of Gitanjali Gems Ltd. as having said, “Imports will increase now as for the past two months people were waiting for the reduction in duty. With Akahaya Tritiya around the corner, imports will only rise next month.”
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org