The gold price was supported Thursday by a more doveish Federal Reserve, a loosening of Indian import restrictions and yet another breakdown in Greek debt talks. Gold for April delivery on the Comex division of the New York Mercantile Exchange was last up $18.70, or 1.55 percent, at $1,218.90 per ounce. Trade has ranged from $1,211.10 to $1,222.90. The yellow-metal bounced yesterday afternoon after the minutes from the latest Federal Reserve meeting indicated that the US central bank is not in a hurry to raise interest rates. “Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time,� according to the minutes from the January 27-28 Federal Open Market Committee meeting released on Wednesday. The members of the Fed’s policy board are locked in what’s become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008. The current market consensus is that the first hike will happen sometime in the second half of this year. “The minutes were revealing in that the tenor of comments seemed a good deal more dovish than the markets had expected, with the FOMC paying far greater heed to international developments than we or others had thought likely,� Dennis Gartman, editor of the Gartman Letter, said. “We are left to wonder if the committee members are concerned about the rising US dollar, or are more concerned about economic weakness in Europe and China, or are perhaps concerned about political circumstances abroad,� he added. Elsewhere, India’s central bank has removed a ban on the import of gold coins and medallions. Nominated banks are now permitted to import gold on a consignment basis, although all domestically sold gold will be against upfront payments, the Reserve Bank of India said in a statement. Rumours have circulated since the start of the year that the RBI may cut import duties on gold, which are currently at 10 percent – perhaps by 2-4 percentage points or even to as low as two percent, according to some sources. “The tax hikes on bullion have been unpopular with the gold-buying public as well as with merchants and jewellers,� HSBC noted. “India is likely to run a current account deficit for the foreseeable future but over the next two years the deficit is likely to be at low and manageable levels. In our view, this gives the authorities the chance to potentially reduce the tariffs on gold imports,� the bank added. In Europe, Germany rejected Greece’s application to extend its loan agreement and renegotiate the terms of its bailout, which raised the odds that Athens could default in the coming weeks. Berlin said that Greece’s request for a six-month extension provided “no substantial solution�. But not all of data flow has been gold supportive. Switzerland continues to be a net importer of gold last month, according to latest Swiss Customs data. Net import volumes increased by 62 percent month-on-month to 84.1 tonnes, which was the largest net inflow on record since monthly data became available last year and coincides with subdued physical gold activity so far this year, UBS analyst Edel Tully noted. In the wider-markets, the dollar was 0.14 percent stronger at 1.1383 against the euro, while Germany’s DAX and France’s CAC-40 were up 0.03 percent and 0.55 percent. Light sweet crude (WTI) oil futures for March delivery on the Nymex were down $2.13, or 4.09 percent, at $50.01 per barrel. As for other precious metals, Comex silver for March delivery were up 45.0 cents, or 2.77 percent, at $16.715 per ounce. Trade has ranged from $16.445 to $16.770. Platinum futures for April delivery on the Nymex were up $12.50 at $1,179.70 per ounce, while the most-actively traded palladium contract was at $778.60 per ounce, up $2.00.

Source