FXStreet (Edinburgh) - The performance of gold prices will hinge on the next move by the Federal Reserve, suggested BofA Merrill Lynch Global Research. Key Quotes “Our US economics team highlights that recent monetary easing in Europe and China has made a first rate hike by the Fed more likely this year”. “As such, we reinforce our cautious view on gold quotations: while dovish comments from the Fed can indeed lead to short-term rallies, a rate hike is set to ultimately remove support, unless it is accompanied by a pick-up of inflation, which has so far however not materialized”. “Beyond the tactical upside to gold quotations, we note that physical gold buying has also remained relatively muted”. “Gold on the local Indian and Chinese markets trades below global prices and at parity respectively, suggesting buyers in those two countries have so far not stepped up their purchases meaningfully”. For more information, read our latest forex news.