positive news for gold

While the higher dollar and uncertain European situation is driving gold lower, Jeff Wright, managing director at Global Hunter Securities, said he is “optimistic that gold will regain ground via physical demand from China and India in the coming weeks.”

China had record imports for physical gold in the first quarter, and “we see this trend continuing with a flight from riskier asset classes in China,” he said.

Also, “the Indian physical market should begin to recover as the government announced it will cancel the excise tax imposed on gold jewelry and imported gold,” said Wright. Jewelers in India had gone on strike earlier this year to protest against the tax. Read about the early April end to the strike.

The news on India and China are of “seismic importance,” said Ross Norman, chief executive officer at Sharps Pixley, though “neither elicited a move greater than the typical bid/offer spread of the spot price.”