A weaker US dollar and the Bank of Japan’s decision to relax monetary policy have given a boost to the gold price.
On the COMEX division of the New York Mercantile exchange the February futures contract is US$3 firmer at US$1,690 an ounce, after the Japanese central bank elected to double its inflation target to 2%, as it eased monetary policy as expected.
It said it would start its programme from January 2014 after the current programme ends.
That decision more than offset the effects of a decision by India to raise duties on gold imports to 6% from 4%, as the government looks to make inroads into its current account deficit.
The last time India raised import duties on gold by a couple of percentage points, in March of last year, imports dived by 25% in 2012.
Indians are among the world’s keenest gold buyers, largely for the purposes of jewellery rather than as an investment.
On the corporate front, US mining giant Freeport McMoRan was wanted after fourth quarter earnings topped analysts’ estimates.
The outperformance was largely on the back of strong growth in copper sales, although gold sales were also higher, as in the fourth quarter of the previous year the firm’s output at the Grasberg mine in Indonesia – the biggest operation in the Freeport empire – was hit by a strike.
In the silver market, the March contract was up 7 cents to $32.01 an ounce in trading on COMEX.