Gold Market Commentary and Outlook

Gold ended August lower m-o-m, down 2% to US$1,715.9/oz – its fifth consecutive monthly decline.  The promising bounce that began in mid-July ran out of steam in mid-August after failing to break the US$1,800/oz resistance level.

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.

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 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 fell in September by 4% to around US$1,743/oz. This was the second consecutive month of declines, with gold now over 8% lower y-t-d. Gold wasn’t alone. Treasuries, Corporates, US- and non-US equities all fell in September possibly as a result of deleveraging. The Q2 level of margin debt for equities was at a record high. It would be understandable if some leverage has been removed as we head into the historically volatile month of October. And it’s quite possible that this de-leveraging has affected most assets (energy and industrial metals excepted).

Gold fell slightly during August, down 0.6% in US dollars, on modestly firmer interest rates following strong US jobs data.