Research

Gold fell 3.5% in July, leaving it down 2.9% on the year at US$1,753/oz. A strong US dollar and sticky real yields weighed on gold in the first half of July.

Investors face a challenging environment during the second half of 2022, needing to navigate rising interest rates, high inflation and resurfacing geopolitical risks. In the near term, gold will likely remain reactive to real rates, which in turn will respond to the speed at which global central banks tighten monetary policy and their effectiveness in controlling inflation.

Weaker investor interest weighed on gold in May

Throughout April, gold remained among the best performing assets in 2022 up 5% in US dollar terms – yet it ended the month 1.6% lower at US$1,911/oz.

Gold rose for the second consecutive quarter in Q1, ending 8% higher at US$1,942/oz – its best quarterly performance since Q2 2020.

Geopolitical crisis takes centre stage in February

The LBMA Gold Price PM (US$) was marginally down in January, dipping less than 1% to US$1,795/oz. But this provides an incomplete picture of the interesting dynamics seen throughout the month.

Gold may face similar dynamics in 2022 than those from last year as competing forces support and curtail its performance. 

Gold rose 2% in November based on the LBMA reference price, rallying early in the month before giving up most of those gains in the following weeks.

Gold rose slightly in October, despite a risk-on environment and increases in short-term bond yields