“Jewelers in India kept shutters down for almost a month-and-a-half against the proposed 1% excise duty on non-silver. Interestingly, the end of jewelers’ strike in India has coincided with a drop in prices. More important, it is also the buying season in India. In addition, a normal monsoon is expected in India, which is a key for robust gold demand in the country. When you consider all these factors, gold’s outlook does not look that bad. I believe that the precious metal will get support from physical demand. While gold could see a pullback ahead of the Fed meeting, anticipated strong physical demand means that the downside is not likely to be significant,” according to a Seeking Alpha analysis on gold.
Related: Bullish Forecast for Gold ETFs
However, emerging market demand for gold has not picked up yet. For instance, China has shown little demand, with the Shanghai Gold Exchange seeing little growth in volume. While the higher prices may have deterred Asian buyers, demand could pick up if prices persist in going higher, analysts said.
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Tom Lydon’s clients own shares of GLD.