Gold Prices Rise Following Positive Economic Factors
Gold prices are beginning to look a lot like gold prices. The precious yellow metal is starting to make a comeback as prices for the bullion scaled $1,300 an ounce on Thursday following several positive economic factors.
News of India’s central banks easing some of its importing rule was a start. The bank lighten up on its mandatory 20 percent re-export on all gold cargoes, allowing trading houses and certain banks to boost imports.
“We do know that there is a wedding season in India and relaxing these import rules will break the premium price for the metal in the country, which could lift up the demand,” said Naeem Aslam, chief market analyst at AvaTrade.
Gold futures for June delivery exchanged hands for $1,295.00 an ounce on the Comex division of the New York Mercantile Exchange, up $7.10 from Thursday trading session.
India’s demand for gold has significantly dropped in recent months. Jewelry consumption declined 9 percent to 145.6 tons as did India’s buying of bars and coins, dropping 54 percent to 98 tons. India was replaced by China in 2013 as the biggest gold user after the government curbed shipment.
Other economic factors for gold included the U.S. jobless claim increasing more than forecasted. The increase boosted demand for the precious metal, gaining 7.7 percent on concerns the economic recovery was fragile.
“Today’s data shows that the job market is struggling and rate hikes may be far away,” Chris Gaffney, senior market strategist at EverBank Wealth Management, said in an interview. “‘There is some safe-haven buying.’’
According to Gaffney, imports by India will probably rise after the central banks reduction in re-export fees, allowing more firms to buy metal from overseas. India’s imports may expand by 10 metric tons to 15 tons a month with shipments doubling in the next few months.
“We are seeing some physical buying because of optimism about India,” Gaffney said.
Gold prices settled at $1,293 an ounce on Thursday.