Gold Sheds Rate-Cut Bets as Inflation Boosts Its Hedging Appeal

The World Gold Council says gold is no longer trading solely as a bet on lower interest rates. According to Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council, markets are closely watching US inflation data as investors assess the outlook for monetary policy.

Strong flows into gold investment funds are providing significant support for gold's upward trend in the short and medium term, said Naylor. The current move in gold differs from the market conditions seen when the metal was trading around $4,000 an ounce.

Retail investors have been using recent price declines as an opportunity to buy gold, creating what could be described as a 'natural floor' under gold prices.