Gold Stabilizes Around $4,000/Oz as Central Banks Boost Demand
Gold prices appear to have found a base after a volatile July, according to Vedika Narvekar, Research Analyst at Anand Rathi Shares and Stock Brokers. The precious metal repeatedly defended the $4,000/oz level despite higher interest rate expectations and a strong US dollar.
The worst of the downside may be behind gold, with central banks purchasing 289 tonnes in Q2, marking the strongest second-quarter buying on record, said Narvekar. Asian demand also strengthened considerably, particularly from China, where institutional investors have been buying aggressively around the $4,000/oz level.
However, markets remain cautious ahead of US labor market data releases this week, which will determine whether the Federal Reserve remains on course for a potential September rate hike. Rising real yields and lingering expectations of another Fed rate hike could continue to cap gold gains in the near term.