Rising investor interest overshadows Gold physical market

UNITED STATES August 01 2017 9:09 PM
NEW YORK (Scrap Register): Gold has been rallying in recent weeks, gaining traction above the 200-day moving average, as investor interest recovers from early-month weakness, helping overshadow a softer physical market, said Standard Chartered. 

Spot gold has edged above $1,270 an ounce in each of the last three business days after previously not trading above this since June 14. 

“We continue to expect the Fed to remain on hold in the coming months, and then to hike by 25 [basis points] in December, while the balance-sheet adjustment should be gradual, setting a favorable backdrop for gold,” added Standard Chartered.

Gold’s latest two attempts at $1,300 an ounce were accompanied by rising geopolitical tensions, but these gains were not sustained. Gold’s correlation with the USD [dollar], 10-year U.S. Treasuries and five-year real yields remains intact; the current USD weakness continues to set a positive and important backdrop for gold prices.

India’s gold demand surged ahead of the start of goods and services tax last month, Standard added. However, analysts also added, “We continue to expect demand to remain soft as jewelers realign systems ahead of the seasonally strong period for consumption in September.”