Spot gold prices open London at new 6-week high
Physical spot gold prices rose throughout the Asian session on Tuesday, regaining $5 from Monday's US close.
That put spot gold prices at $676.50 by the time London first opened after the long Easter holiday weekend – the highest London opening in six weeks.
"The fundamental strength is very much intact in gold," reckons Si Kannan, associate vice president at Kotak Commodity Services in Mumbai.
Next week will see the festival of Akshaya Thrithiya celebrated across southern India.
Local jewelers are now looking to re-stock ahead of this increasingly popular season for gold purchases. (Learn more about India's impact on global gold prices here...)
"People are not expecting as high a demand as last year," says Kannan, "but large physical purchases would certainly support the gold market."
In the "paper gold" market, gold futures for June delivery traded up to touch $682.50 yesterday in New York, even though London was closed for the long Easter holiday.
That's the highest level since March 1st.
Now the market will be watching for tomorrow's release of the minutes from the last US Federal Reserve's monetary meeting.
Dr Bernanke and his team left the Fed's interest rate at 5.25%, but they dropped a key reference to further "tightening" in the face of inflationary pressures.
The gap between Fed interest rates and inflation is a crucial guide to the long-term direction of gold prices, a fact noted by Michael Lewis at Deutsche Bank late last week.
"We have a long-term bullish view on the commodity," wrote Lewis in a note on Thursday.
Jon Bergtheil, global metals strategist at JP Morgan, agrees.
"Gold seemed to ignore Iran when it was bad and ignores Iran when it’s better," he notes.
"We prefer to be in gold right now than base metals. We are positive and see gold at $725 by the beginning of the next year."
To learn more about the long-term factors driving the current bull market in gold, click here now...