In recent days, the price of gold has experienced a slight decline, raising concerns among investors. Despite the usual boost in gold prices during times of rising risk aversion, the correction follows a significant price surge of almost $200 between June and July. Commerzbank’s Commodity Analyst Barbara Lambrecht highlights this trend, noting that the correction may be a result of market exaggeration.
Looking ahead, the price of gold is expected to defend its current level, especially if Federal Reserve Chairman Powell hints at potential interest rate cuts following the upcoming Fed meeting. However, a new report from the World Gold Council (WGC) suggests that central bank purchases have decreased, which could weaken gold’s price support.
Recent data also indicates a decline in China’s central bank buying interest due to high prices, while ETF investors show renewed interest. Despite slight outflows in the second quarter, European ETFs saw inflows in June, signaling a shift in sentiment towards gold investment.
Overall, while the recent price decline may cause concern, it is important to monitor key support levels and upcoming market developments to make informed investment decisions.