As I wrote about last week, support for the gold price has materialised around $1240, with the spot price making gradual progress up to $1280. A healthy portion of credit for today’s move by gold can be taken by US dollar, which has strengthened against both the euro and the pound.
The fundamental picture for gold has not really changed over the last week. The situation in Ukraine is still far from ideal, but the imminent threat of military action has reduced. Although the Russian and Ukraine delegates are far from agreed over the pricing structure for energy supplies to Ukraine, they are at least sitting around the table to discuss the matter. The new government in India is still in the early days of its reign and could well instigate a new policy as far as the taxing of gold imports is concerned.
Though the yellow metal continues to keep itself afloat, and may edge higher still, I still believe that it will struggle to break any higher than the $1280 region.