EBC Markets Briefing | Gold prices drop with lingering political uncertainty
Gold prices were on the back foot on Monday as Treasury yields rallied. Asian retail gold buyers are still keen to purchase more of the precious metal even as prices hover at elevated levels.
The Chinese market is “probably the biggest driving force in price discovery right now,” said London Bullion Market Association CEO Ruth Crowell. “The growth in terms of demand for gold in Asia will continue.”
Gold's rally to record highs shows every sign of continuing in the second half of 2024 as the fundamental case for bullion remains firmly in place, though $3,000 per ounce looks just out of reach, industry experts said.
Central banks across the globe have been ramping up reserves held in gold due to geopolitical and economic risks. The elections in Europe and the US will likely add more volatility to markets in favour of the metal.
President Emmanuel Macron has been warned by Nicolas Sarkozy that his decision to call snap elections could plunge France into chaos, as his centrist party languishes third in opinion polls.
New US sanctions against Russia have caused an immediate suspension of trading in dollars and euros on the Moscow Exchange. The peace summit in Switzerland ended without major breakthroughs expected.
Gold has lost momentum since rising above $2,400 last month. It looks neutral above 50 SMA and range trading will likely remain for longer.
EBC Economic Research Findings Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Financial News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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