Gold prices could get an unexpected boost in the second quarter on the back of global uncertainties and rising demand in India. Standard Chartered forecasts gold will rise to US$1,260 an ounce during the April to June period with investors looking to the yellow metal as a safe haven as negotiations get underway on Britain’s exit from the European Union and as closely watched elections take place in France on April 23 and May 7. “Early Brexit negotiations and the French elections could boost prices, particularly given that markets do not expect a US rate hike in May and there is pent-up demand in India,” said Suki Cooper, executive director, precious metals research at Standard Chartered. Standard Chartered expects the gold price rise to be short term, with bullion set to slide back to US$1,250 per ounce later in the year, although they acknowledged factors that could propel gold prices in an uptrending direction. Cooper highlighted additional uncertainties, including the fallout from a protectionist Trump administration. “Markets are complacent on political risk,” she said. “Positioning is relatively light, suggesting significant scope for fresh safe-haven flows amid a surprise event.” Whereas rising interest rates are traditionally considered a headwind for gold, data shows that investors actually increased their long positions after the Federal Reserve’s decision to raise its base rate by a quarter point in March. The impact of a further policy tightening by the Fed is unclear. The market currently assigns a 13 per cent probability to a rate hike in May, and a 54 per cent probability to a rate hike in June. The gold price has risen about 8 per cent in the first quarter to US$1,250 an ounce. Standard Chartered expects demand for gold will pick up in the coming weeks, driven by India ahead of an important religious festival on April 28. Another factor to watch is how India will implement a Goods and Services Tax and which bracket jewellery falls into, said Cooper. “Swiss shipments to India firmed month on month in February, underscoring the provisional data and anecdotal evidence suggesting India’s appetite for gold improved after the Union Budget,” Cooper said. Gold one-month implied volatility has tumbled to 2005 lows and three-month implied volatility is at its lowest since July 2014. Gold implied volatility measures the change in the price of an asset with respect to variations in the price of its call option. “The uptick in short interest suggests gold prices are likely to consolidate recent gains,” Cooper said.