PRESSEMITTEILUNGEN
Gold continues sideways while remaining caught between competing forces
Friday 01st July '22
Gold remains trapped between competing forces. Persistently high and rising levels of inflation in major economies are lending support while the hawkishness from central banks, to control the inflation, is creating headwinds. Gold has held its ground relatively well in the face of the sharp rise in US Treasury yields and an appreciating dollar and many investors are still recognising its value as a diversifier – given it is broadly flat this year while equities have endured large losses. For this reason, physical gold held in exchange traded products worldwide stands elevated at just under 105 million troy ounces (oz) as of 24 June, compared to around 98m oz at the start of the year. Going forward, if stagflationary risks increase, i.e., the risk of high inflation and disappointing growth, gold could remain supported. Most recently, G7 countries have announced a ban on Russian gold. While the physical impact of this decision may be relatively limited given the quantity of gold exported by Russia to G7 countries is not material enough to impact gold prices, the symbolic decision could impact sentiment – potentially through higher net speculative positioning, although this remains to be seen.