Gold Market Commentary and Outlook

Equity yields support gold as investors position for historical September strength

Gold registered healthy positive returns for the second consecutive month, erasing the losses accumulated during Q1. Gold ended May at US$1,899.95/oz – its highest level since January and back above its 200-day moving average – representing a 7.5% m-o-m increase.

Marking a turnaround from the first three months of the year, gold rebounded 4.5% in April to finish the month at US$1,768/oz - its highest monthly closing level since January and its first positive monthly return since December 2020.

A sharp rise in US interest rates and a stronger dollar have weighed on gold recently. But a rebound in economic activity and a lower gold price have provided opportunities for consumers and strategic investors alike.

As we look ahead, we expect that the interplay between market risk and economic growth in 2019 will drive gold demand. And we explore key trends that will influence its price performance.

In 2017, investors added gold to their portfolios as incomes increased, uncertainty loomed, and gold’s positive price momentum continued. As 2018 begins we explore four key market trends and their implications for gold.

In 2016, investors around the world returned in large numbers to the gold market, as a combination of macroeconomic drivers and pent up demand kept interest in gold high. As we start the new year, there are some concerns that US dollar strength may limit gold’s appeal. 

This latest edition of our Investment Commentary examines gold’s performance in 2015 and explores the factors that may influence gold in 2016.

On Monday 20th July the gold price fell sharply, dropping 4.3% from its Friday closing price. This note explains what happened and counters some misconceptions.

Despite economic uncertainty in some regions, the gold price declined in the first half of 2015. While puzzling to some investors, this is consistent with market expectations that the risks could be contained.