Demand from countries outside the U.S. is often a pivotal factor for gold and the related exchange traded products, such as the SPDR Gold Shares (NYSEArca: GLD). With that in mind, there could be some favorable demand catalysts on the horizon for the yellow metal.
Gold has enjoyed greater demand in a low interest-rate environment as the hard asset becomes more attractive to investors compared to yield-bearing assets. However, traders lose interest in gold when rates rise since the bullion does not produce a yield.
In the face of a stronger dollar and speculation that the Federal Reserve could raise interest rates as many as three times this year, gold prices could move modestly higher with some help from emerging markets, namely China and India.
“But news this week suggests India’s gold demand is coming back to life — for the first time in nearly a year. Preliminary statistics on India’s February gold imports showed a major lift. With gold experts GFMS estimating that the country brought in 50 tonnes of bullion during the month — up 82% from the 27.4 tonnes Indian buyers imported during February 2016,” according to ETF Daily News.