Daily outlook for gold prices: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-Gold is trading largely unchanged at $1,210 per troy ounce as the week draws to a close. The sharp appreciation of the US dollar - which climbed to a 4½-week high against the euro - drove gold in euro terms to a ten-day high of €1,080 per troy ounce.

-January saw the US inflation rate slide into negative territory for the first time since October 2009, raising real interest rates in the US as well as the opportunity costs of holding gold. What is more, US consumer prices - discounting energy and food - increased somewhat more strongly than anticipated, which triggered speculation about interest rate hikes. Both these factors argue against any higher gold price in USD. 

-As the figures from the Census and Statistics Department of the Hong Kong government show, China imported 6.6% more gold from Hong Kong in January than in the previous month. On a net basis, 76.1 tons of gold were thus imported from the former British crown colony.

-The higher net imports are probably due to increased demand for gold in the run-up to the Chinese New Year festivities. However, a closer look at the statistics reveals that both imports and exports declined significantly on a gross basis. Imports dropped to a five-month low, while exports hit their lowest level in 16 months.

-According to official figures, India imported 57.2 tons of gold in January, which is 55% up on the year-on-year figure. When it presents its budget at the weekend, the Indian government is likely to announce a reduction in duty on gold imports from 10% at present to 2-5%, which suggests we will also see higher gold imports in the coming months.