Standard Chartered said that the second quarter may be the strongest for gold, but analysts also comment that the rally on U.S. political concerns may need fresh refueling, while expectations for a U.S. rate hike remain a worry for the bulls.
As the Trump investigation unfolds, gold prices could be buoyed further, particularly as it has been safe-haven flows that have driven prices higher.
In the near term, although gold’s safe-haven bid has been reignited, prices are unlikely to surge higher without additional refueling given the investigation is likely to take some time.
A rate hike remains the main drag on gold prices and the probability of a June hike rose again to 97.5% at the end of last week. One key for the market will be India’s Goods and Services Tax for gold, with a decision on treatment of the metal expected around June 3.
Depending on how import duties and sales taxes are treated, a rate above 5-10% could prove to a temporary headwind.
Standard Chartered maintains their view that Q2 2017 is likely to be the strongest quarter for gold prices, with prices averaging $1,270 an ounce.
Reference: Scrapregister
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