Gold prices have gained 6.4% early in 2012. Buyers in the futures markets have supported the rise, along with rising demand for gold bullion from jewelry buyers in India. UBS analysts explain that investors in India are seeking to avoid an import tax hike while taking advantage of the decline in rupee-denominated gold prices.
Likewise, news that China’s government will most likely take steps to help kick start the economy supported the rise in gold prices earlier in the week. Consumers in China helped to push gold prices to their highest in over a month. This activity will downshift now that the Lunar New Year break will take place, reports Lewa Pardomuan on Reuters.
“Gold has had a fairly good run so far this year, maybe this is time to consolidate a little. A pause here would probably be a healthy sign. After that I think the next move is likely to be up towards $1,680,”Nick Trevethan, senior commodity strategist at ANZ Bank, said. [Could Gold ETFs Worsen a Price Decline?]
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Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD and SLV. John Spence owns ZSL.