Gold Prices Unchanged Amid Inflation Fears
The World Gold Council has warned of a possible second wave of high inflation, but notes that this does not automatically imply a major gold rally. The council's analysis suggests that the response of real rates, the US dollar, growth expectations, central banks, and Asian investor demand will play a significant role in determining gold's performance.
Gold prices have been relatively stable in July, finishing at $4,027/oz, down 8% year-to-date. The council attributes this stability to positive momentum factors, which often lead to reversals in subsequent periods.
However, the World Gold Council also notes that inflation could reignite if another shock arrives before expectations have fully normalized. This time, the risk may come from strategic stockpiling and competition for critical resources, rather than oil embargoes.