This via HSBC on their outlook for gold. And also some useful stuff in here on the USD, EUR, and more

Gold recovery faces upside test from higher yields

  • While Mr. Draghi's comments may have been misinterpreted as to the extent or timing of tapering or rate increases, the stronger EUR did help lift gold.
  • The whipsaw action in the financial markets after ECB officials rushed to clarify Mr. Draghi's comments shows how sensitive monetary officials are to what they may view as overreactions in the financial markets.
  • Still further EUR gains versus the USD would likely support gold and HSBC forex strategists remain generally bearish on the USD versus the EUR as well against most other currencies.

Gradual USD weakness will likely bolster gold.

  • ... Higher yields will constrain further gold gains and while the gold rally has recently come under pressure, we certainty do not believe it is reversed.

The demand for gold in India, the world's second largest consumer of bullion, is an important factor in the market.

  • Gold premiums have risen to USD5/oz in most gold trading centers.
  • There may be a reluctance to import bullion ahead of the implementation of the new Goods and Service Tax scheduled for 1 July.
  • But domestic demand has been brisk, as reported by local merchants and dealers.
  • Earlier this month, the GST Council fixed the rate of tax on gold at 3%, keeping it close to the current tax incidence of about 2% on the precious metals across most states in the country. We expect a more quiet market in the immediate aftermath of the tax increase. But it is likely that demand will recovery thereafter, as the 3% increase in GST was at the low end of expectations.