Gold: ETF inflows and sceptical outlook – Commerzbank

Commerzbank’s Carsten Fritsch notes Gold breaking above USD 4,400 per ounce despite a sharp Oil rally, with Fed rate expectations only modestly higher after weak US labour data. ETF investors added 14.5 tons over four days, and global Gold ETFs saw July inflows of 23.5 tons, mainly in Europe and Asia. Fritsch remains sceptical that Gold can defy higher Oil and rates for long.

Price surge driven by ETF demand

"This morning, the gold price rose above the USD 4,400 per troy ounce mark for the first time since early June."

"Despite the higher oil price, interest rate expectations have risen only slightly and remain lower than they were before Friday’s disappointing US labour market data."

"Gold is receiving a boost from ETF investors."

"According to data from Bloomberg, there have been inflows into gold ETFs totalling 14.5 tons over the last four trading days."

"We view the recent price rise with scepticism, as interest rate expectations are unlikely to decouple from higher oil prices on a sustained basis."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)