The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
The precious metal is in demand as Narendra Modi becomes the new Prime Minister of India. Mr Modi has yet to select the next finance minister, but it is expected that whoever takes over the role will ease restrictions on importing gold. India is the second largest importer of the yellow metal, behind China.
The European Central Bank and three other European central banks have agreed not to sell ‘significant’ amounts of gold over the next five years. The new agreement will replace the deal which is set to expire in September this year.
On Wednesday, the Federal Reserve will release its minutes at 7pm (London time) and the focus will be on the language used by the US central bank. If the minutes have a similar dovish tone to the previous release, it could boost the metal to the 50-day moving average of $1308. If gold holds above the 200-DMA of $1294 the outlook will be more positive than negative.