Gold Market: An Unseasonal August May Lie Ahead

Month in review from World Gold Council

  • Gold gained 3.1% in July helped by a lower dollar and a spike in breakeven inflation rates
  • Global gold ETFs shed holdings for a fourth consecutive month but COMEX managed money net long futures positions more than offset the decline, rising by 93t

Looking forward

  • August has been a good month for gold returns over the past two decades, likely driven by seasonally weak bond yields and consumer sentiment, anticipation of seasonal equity volatility in September, and some gold restocking in India and China
  • This time round we don’t expect these factors to be as supportive as in the past, with yields pressured higher, equities trending up and conditions for a demand pick-up poor in India and China
  • However, this does not diminish our view that over the next few months, economic concerns will continue to mount and asset volatility will rise with them – factors that should help underpin investor interest in gold.

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