UNITED STATES June 05 2017 11:34 PM
NEW YORK (Scrap Register): Standard Chartered sees potential upside for gold this week despite weekend news that India’s goods and services tax on gold will be 3%, more than the jewelry industry had hoped for. 

“The weaker-than-expected U.S. employment report, released on Friday, boosted gold prices, but has not derailed the likelihood of a rate hike at the June FOMC meeting,” said Standard Chartered.

However, market conviction for subsequent rate hikes is likely to waver. U.S. event risk is unlikely to subside before the next FOMC meeting, especially given congressional testimony by former FBI director James Comey that is scheduled for this week. Meanwhile, U.K. elections also take place.

“Our economists note that although some polls point to a hung parliament, a Conservative Party majority is still likely, but a less-than-50-seat majority could raise questions about Prime Minister [Theresa] May’s political future, leaving Brexit talks vulnerable to ‘no deal’ hardliners,” Standard Chartered added.

“The weaker-than-expected U.S. data on Friday has resulted in gold garnering interest, and this week’s events point towards upside price risk despite the higher-than-hoped for goods and services tax in India,” they noted.